UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41871

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

(Exact name of registrant as specified in its charter)


Washington		91-1069248
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

3545 Factoria Blvd. SE Sterling Plaza 2, 3rd Floor Bellevue, Washington		98006
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code): (206) 674-3400

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	EXPD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At November 3, 2025, the number of shares outstanding of the issuer’s common stock was 134,020,931.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)


	September 30, 2025			December 31, 2024
Assets:
Current Assets:
Cash and cash equivalents	$	1,190,167		$	1,148,320
Accounts receivable, less allowance for credit loss of $7,797 at September 30, 2025 and $6,878 at December 31, 2024		2,045,284			1,997,840
Deferred contract costs		263,491			349,343
Other		175,605			164,272
Total current assets		3,674,547			3,659,775
Property and equipment, less accumulated depreciation and amortization of $647,057 at September 30, 2025 and $615,533 at December 31, 2024		465,006			449,404
Operating lease right-of-use assets		539,486			551,652
Goodwill		7,927			7,927
Deferred federal and state income taxes, net		77,499			70,671
Other assets, net		15,117			15,029
Total assets	$	4,779,582		$	4,754,458
Liabilities:
Current Liabilities:
Accounts payable		1,146,062			1,036,749
Accrued liabilities, primarily salaries and related costs		427,219			451,921
Contract liabilities		334,541			441,927
Current portion of operating lease liabilities		111,174			106,736
Federal, state and foreign income taxes payable		28,762			29,140
Total current liabilities		2,047,758			2,066,473
Noncurrent portion of operating lease liabilities		449,186			462,201
Commitments and contingencies
Shareholders’ Equity:
Common stock, par value $0.01 per share. Issued and outstanding: 134,019 at September 30, 2025 and 138,003 at December 31, 2024		1,340			1,380
Additional paid-in capital		—			—
Retained earnings		2,468,131			2,455,132
Accumulated other comprehensive loss		(189,069	)		(233,500	)
Total shareholders’ equity		2,280,402			2,223,012
Noncontrolling interest		2,236			2,772
Total equity		2,282,638			2,225,784
Total liabilities and equity	$	4,779,582		$	4,754,458

See accompanying notes to condensed consolidated financial statements.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Revenues:
Airfreight services	$	1,020,258	$	986,950	$	2,873,805	$	2,606,647
Ocean freight and ocean services		746,120		1,017,618		2,203,567		2,240,079
Customs brokerage and other services		1,128,373		995,563		3,135,683		2,799,084
Total revenues		2,894,751		3,000,131		8,213,055		7,645,810
Operating Expenses:
Airfreight services		766,783		740,356		2,113,679		1,923,115
Ocean freight and ocean services		542,304		783,827		1,599,680		1,675,931
Customs brokerage and other services		630,570		569,781		1,756,330		1,567,606
Salaries and related		490,437		450,308		1,419,710		1,289,901
Rent and occupancy		68,308		61,024		198,392		181,873
Depreciation and amortization		14,248		15,774		42,699		45,914
Selling and promotion		9,657		7,589		28,159		22,366
Other		84,402		69,948		252,770		198,885
Total operating expenses		2,606,709		2,698,607		7,411,419		6,905,591
Operating income		288,042		301,524		801,636		740,219
Other Income:
Interest income		8,491		9,917		26,858		36,699
Other, net		1,640		973		3,529		4,599
Other income, net		10,131		10,890		30,387		41,298
Earnings before income taxes		298,173		312,414		832,023		781,517
Income tax expense		75,095		82,488		220,927		206,040
Net earnings		223,078		229,926		611,096		575,477
Less net earnings attributable to the noncontrolling interest		822		352		1,471		1,282
Net earnings attributable to shareholders	$	222,256	$	229,574	$	609,625	$	574,195
Diluted earnings attributable to shareholders per share	$	1.64	$	1.63	$	4.46	$	4.04
Basic earnings attributable to shareholders per share	$	1.65	$	1.63	$	4.47	$	4.06
Weighted average diluted shares outstanding		135,285		141,027		136,790		142,288
Weighted average basic shares outstanding		134,956		140,417		136,346		141,540

See accompanying notes to condensed consolidated financial statements.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)


	Three months ended September 30,					Nine months ended September 30,
	2025			2024		2025		2024
Net earnings	$	223,078		$	229,926	$	611,096	$	575,477
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments, net of income tax (benefit) expense of $(214) and $930 for the three months ended September 30, 2025 and 2024 and $1,858 and $(610) for the nine months ended September 30, 2025 and 2024		(2,818	)		28,584		44,261		2,197
Other comprehensive (loss) income		(2,818	)		28,584		44,261		2,197
Comprehensive income		220,260			258,510		655,357		577,674
Less comprehensive income attributable to the noncontrolling interest		798			457		1,301		1,400
Comprehensive income attributable to shareholders	$	219,462		$	258,053	$	654,056	$	576,274

See accompanying notes to condensed consolidated financial statements.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three months ended September 30,						Nine months ended September 30,
	2025			2024			2025			2024
Operating Activities:
Net earnings	$	223,078		$	229,926		$	611,096		$	575,477
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for losses (recoveries) on accounts receivable		839			(582	)		2,651			1,456
Deferred income tax benefit		(1,565	)		(1,057	)		(9,012	)		(5,680	)
Stock compensation expense		18,046			9,760			56,862			47,836
Depreciation and amortization		14,248			15,774			42,699			45,914
Other, net		1,616			162			8,381			4,032
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(37,828	)		(301,167	)		12,337			(647,794	)
(Decrease) increase in accounts payable and accrued liabilities		(16,747	)		107,535			26,719			402,818
Decrease (increase) in deferred contract costs		48,449			(30,657	)		102,805			(216,977	)
(Decrease) increase in contract liabilities		(53,358	)		50,527			(125,685	)		254,902
Increase in income taxes payable, net		21,740			20,331			7,412			13,163
Increase in other, net		(17,150	)		(10,580	)		(13,063	)		(1,502	)
Net cash from operating activities		201,368			89,972			723,202			473,645
Investing Activities:
Purchase of property and equipment		(11,098	)		(12,291	)		(40,125	)		(30,415	)
Other, net		924			(225	)		1,104			(62	)
Net cash from investing activities		(10,174	)		(12,516	)		(39,021	)		(30,477	)
Financing Activities:
Proceeds from borrowings on lines of credit		4,717			10,636			5,341			14,762
Payments on borrowings on lines of credit		(2,728	)		(191	)		(3,065	)		(20,300	)
Proceeds from issuance of common stock		61,187			53,256			79,362			67,734
Repurchases of common stock		(212,294	)		(140,031	)		(620,764	)		(602,855	)
Dividends paid		—			—			(104,139	)		(102,638	)
Payments for taxes related to net share settlement of equity awards		—			—			(10,353	)		(15,348	)
Distribution to noncontrolling interest		(491	)		—			(1,837	)		—
Net cash from financing activities		(149,609	)		(76,330	)		(655,455	)		(658,645	)
Effect of exchange rate changes on cash and cash equivalents		(7,580	)		20,194			13,121			(4,233	)
Change in cash and cash equivalents		34,005			21,320			41,847			(219,710	)
Cash and cash equivalents at beginning of period		1,156,162			1,271,853			1,148,320			1,512,883
Cash and cash equivalents at end of period	$	1,190,167		$	1,293,173		$	1,190,167		$	1,293,173
Taxes Paid:
Income taxes	$	53,528		$	63,046		$	219,429		$	196,649

See accompanying notes to condensed consolidated financial statements.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

(In thousands)

(Unaudited)


	Three months ended September 30,						Nine months ended September 30,
	2025			2024			2025			2024
Total Shareholders' Equity, Beginning of Period	$	2,195,354		$	2,176,421		$	2,223,012		$	2,390,350
Common Stock Par Value
Beginning of period		1,351			1,406			1,380			1,439
Shares issued under employee stock plans, net		7			6			13			12
Shares repurchased		(18	)		(12	)		(53	)		(51	)
End of period		1,340			1,400			1,340			1,400
Additional Paid-In Capital
Beginning of period		—			7,732			—			—
Shares issued under employee stock plans, net		61,180			53,251			68,996			52,374
Shares repurchased		(79,226	)		(66,436	)		(126,720	)		(96,930	)
Stock compensation expense		18,046			9,760			56,862			47,836
Dividend equivalents paid		—			—			862			1,027
End of period		—			4,307			—			4,307
Retained Earnings
Beginning of period		2,380,278			2,385,740			2,455,132			2,580,968
Shares repurchased		(134,403	)		(74,336	)		(491,624	)		(510,520	)
Net earnings		222,256			229,574			609,625			574,195
Dividend and dividend equivalents paid		—			—			(105,002	)		(103,665	)
End of period		2,468,131			2,540,978			2,468,131			2,540,978
Accumulated Other Comprehensive Loss
Beginning of period		(186,275	)		(218,457	)		(233,500	)		(192,057	)
Other comprehensive (loss) income		(2,794	)		28,479			44,431			2,079
End of period		(189,069	)		(189,978	)		(189,069	)		(189,978	)
Total Shareholders' Equity
End of period		2,280,402			2,356,707			2,280,402			2,356,707
Noncontrolling Interest
Beginning of period		1,929			2,006			2,772			1,063
Net earnings		822			352			1,471			1,282
Other comprehensive (loss) income		(24	)		105			(170	)		118
Distributions to noncontrolling interest		(491	)		—			(1,837	)		—
End of period		2,236			2,463			2,236			2,463
Total Equity
End of period	$	2,282,638		$	2,359,170		$	2,282,638		$	2,359,170
Common Shares Outstanding
Beginning of period		135,134			140,633			138,003			143,866
Shares issued under employee stock plans, net		659			520			1,302			1,162
Shares repurchased		(1,774	)		(1,182	)		(5,286	)		(5,057	)
End of period		134,019			139,971			134,019			139,971

See accompanying notes to condensed consolidated financial statements.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per share data)

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

Expeditors International of Washington, Inc. (the Company) is a non-asset based provider of global logistics services operating through a worldwide network of offices and exclusive or non-exclusive agents. The Company serves a diverse clientele in the technology sector, including cloud & data center services; hyperscalers, semiconductor; personal computers and compute hardware, and industries such as healthcare, automotive, aviation, aerospace, retail and high fashion worldwide.

The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary for the fair presentation of the results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Form 10-K as filed with the Securities and Exchange Commission on February 21, 2025.

All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for per share data or unless otherwise specified. Certain prior year amounts have been reclassified to conform to the current year presentation in the business segment information note as explained in Note 1 F.

Revenue Recognition

The Company derives its revenues by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by the customer. Each performance obligation is comprised of one or more of the Company’s services. The Company's three principal services are the revenue categories presented in the condensed consolidated statements of earnings: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services.

The Company typically satisfies its performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed over the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one to two month-period and contracts with customers have an original expected duration of less than one year. The Company satisfied nearly all performance obligations for the contract liabilities recorded as of June 30, 2025 and December 31, 2024.

The Company evaluates whether amounts billed to customers should be reported as revenues on a gross or net basis. Generally, revenue is recorded on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the services, when it assumes the risk of loss, when it has discretion in setting the prices for the services to the customers, and when the Company has the ability to direct the use of the services provided by the third party. When revenue is recorded on a net basis, the amounts earned are determined using a fixed fee, a per unit of activity fee or a combination thereof. For revenues earned in other capacities, for instance, when the Company does not issue a House Air Waybill (HAWB), a House Ocean Bill of Lading (HOBL) or a House Sea Waybill or otherwise act solely as an agent for the shipper, only the commissions and fees earned for such services are included in revenues. In these transactions, the Company is not a principal and reports only the commissions and fees earned in revenues.

Leases

The Company determines if an arrangement is a lease at inception. Right-of-use (ROU) assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. All ROU assets and lease liabilities are recognized at the commencement date at the present value of lease payments over the lease term. ROU assets are adjusted for lease incentives and initial direct costs. The lease term includes renewal options exercisable at the Company's sole discretion when the Company is reasonably certain to exercise that option. As the Company's leases generally do not have an implicit rate, the Company uses an estimated incremental borrowing rate based on market information available at the commencement date to determine the present value. Certain of our leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. The Company excludes variable payments from ROU assets and lease liabilities to the extent not considered fixed, and instead expenses variable payments as incurred. Lease expense is recognized on a straight-line basis over the lease term and is included in rent and occupancy expenses in the condensed consolidated statement of earnings.

Additionally, the Company elected to apply the short-term lease exemption for leases with a non-cancelable period of twelve months or less and has chosen not to separate non-lease components from lease components and instead to account for each as a single lease component.

Accounts Receivable

The Company’s trade accounts receivable present similar credit risk characteristics and the allowance for credit loss is estimated on a collective basis, using a credit loss-rate method that uses historical credit loss information and considers the current economic environment. Additional allowances may be necessary in the future if changes in economic conditions are significant enough to affect expected credit losses. The Company has recorded an allowance for credit loss in the amounts of $7,797 as of September 30, 2025 and $6,878 as of December 31, 2024. Additions and write-offs have not been significant in the periods presented.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, accrual of costs related to ancillary services the Company performs, typically at the destination location, self-insured liabilities, accrual of various tax liabilities and accrual of loss contingencies, calculation of share-based compensation expense and estimates related to determining the lease term and discount rate when measuring ROU assets and lease liabilities.

F. Recent Accounting Pronouncements

Improvements to Reportable Segment Disclosures

The Company adopted new improvements to reportable segment disclosures on a retrospective basis for the 2024 annual period, and for interim periods beginning January 1, 2025. The Accounting Standards Update (ASU) requires, among other things, the disclosure in interim periods about a reportable segment’s profit or loss and assets that are currently required annually, and disclosures of significant segment expenses and profit and loss measures provided to the Chief Operating Decision Maker (CODM). The ASU does not change how the Company identifies its operating segments. The adoption of this standard resulted in identifying directly related cost of transportation and other expenses and salaries and related costs as significant segment expenses disclosed in the business segment information note, including the reclassifications of such prior year amounts.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued an ASU which expands income tax disclosures by requiring the disclosure, on an annual basis, of a tabular rate reconciliation using both percentages and currency amounts, broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, disclosure is required of income taxes paid, net of refunds received, disaggregated by federal, state/local, and foreign and by jurisdiction, if the amount is at least 5% of total income tax payments, net of refunds received. This standard became effective for the Company on January 1, 2025 and the Company plans to apply this ASU prospectively by providing the new disclosures beginning with our Annual Report on Form 10-K for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods. The Company expects this ASU to only impact its disclosures with no impacts to its consolidated financial statements, cash flows and financial condition.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued an ASU which requires disaggregated disclosures of certain costs and expenses on the income statement on an annual and interim basis. This standard will become effective for the Company on January 1, 2027 with early adoption permitted. The amendment can be applied either on a prospective or retrospective basis. The Company expects this ASU to only impact its disclosures with no impacts to its consolidated financial statements, cash flows and financial condition.

Note 2. Share-Based Compensation

The Company has historically granted the majority of its share-based awards during the second quarter of each fiscal year.

In the nine months ended September 30, 2025 and 2024, the Company awarded 381 and 334 restricted stock units (RSUs), respectively. The RSUs were granted at a weighted-average fair value of $106.21 in 2025 and $114.90 in 2024, respectively. The RSUs vest annually over 3 years based on continued employment and are settled upon vesting in shares of the Company's common stock on a one-for-one basis. The value of an RSU award is based on the Company's stock price on the date of grant. Additionally, in both 2025 and 2024, 15 fully vested restricted stock awards were granted to non-employee directors.

The Company also awarded 94 and 78 performance stock units (PSUs) in 2025 and 2024, respectively. Outstanding PSUs include performance conditions to be finally measured in 2025, 2026 and 2027. The final number of PSUs will be determined using an adjustment factor of up to 2 times or down to 0.5 of the targeted PSU grant. If the minimum performance thresholds are not achieved, no shares will be issued. Each PSU will convert to one share of the Company's common stock upon vesting.

The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year and 583 and 487 shares were issued in the three and nine months ended September 30, 2025 and 2024, respectively. The fair value of the employee stock purchase rights granted was $27.94 and $27.97 per share in 2025 and 2024, respectively.

The Company recognizes stock compensation expense based on the fair value of awards granted to employees and directors under the Company’s Amended and Restated 2017 Omnibus Plan and employee stock purchase rights plans. This expense, adjusted for expected performance and forfeitures, is recognized in net earnings on a straight-line basis over the service periods as salaries and related costs on the condensed consolidated statements of earnings. RSUs and PSUs awarded to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately as there is no substantive service period associated with those awards.

Note 3. Taxes

The Company is subject to taxation in various states and many foreign jurisdictions around the world. The Company believes that its tax positions, including intercompany transfer pricing policies, are reasonable and consistent with established transfer pricing methodologies and norms. The Company is under, or may be subject to, audit or examination and assessments by relevant authorities primarily for years 2009 and thereafter where the ultimate resolution could require significant additional tax, penalties and interest payments. The Indian tax authority (ITA) has asserted that additional income tax applies on transactions between and amongst the Company and its Indian subsidiary, as well as additional service tax applicable to ocean and air imports and exports. We believe that ITA’s positions are without merit and we have thus far been successful in defending our position in Indian courts. However, if these matters are adversely resolved, we would recognize significant additional tax expense, including interest and penalties. The Company establishes liabilities when, despite its belief that the tax filing positions are appropriate and consistent with tax law, it concludes that it may not be successful in realizing the tax position. In evaluating a tax position, the Company determines whether it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position and in consultation with qualified legal and tax advisors.

On July 4, 2025, the United States enacted into law the 2025 Tax Act (officially known as “An Act to Provide for Reconciliation Pursuant to Title II of the H. Con. Res. 14”). The 2025 Tax Act provides for several corporate tax changes including, but not limited to, restoring an election to recognize full expensing of domestic research and development costs, restoring immediate deductibility of certain capital expenditures, and changes to the computations of U.S. taxation on international earnings. The Company is in the process of evaluating the provisions of the 2025 Tax Act, including which elections it may or may not make. While we expect that the 2025 Tax Act may have a positive impact on consolidated tax expense and cash flows, we do not expect it to be material. Elements of the enacted tax laws and regulations could be impacted by further legislative action as well as additional interpretations and guidance issued by the Internal Revenue Service or Treasury and by similar governmental bodies in jurisdictions outside of the U.S. Such changes could impact the estimates of the amounts the Company has recorded.

The Company’s consolidated effective income tax rate was 25.2% and 26.6% for the three and nine months ended September 30, 2025, as compared to 26.4% in both comparable periods of 2024. The decrease during the three months ended September 30, 2025, was principally from an increase in Foreign-derived intangible income (FDII) deductions. All periods benefited from U.S. income tax deductions for FDII as well as available U.S. Federal foreign tax credits principally from withholding taxes related to our foreign operations. The Company has not incurred any significant expenses for any period presented for either the 15% corporate alternative minimum tax, nor for the global minimum tax regime (also known as Pillar Two).

Note 4. Basic and Diluted Earnings per Share

Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential shares represent outstanding stock options, including purchase options under the Company's employee stock purchase plan, and unvested RSUs. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding.

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Numerator:
Net earnings attributable to shareholders	$	222,256	$	229,574	$	609,625	$	574,195
Denominator:
Weighted-average basic shares outstanding		134,956		140,417		136,346		141,540
Effect of dilutive share-based awards		329		610		444		748
Weighted-average diluted shares		135,285		141,027		136,790		142,288
Basic earnings per share	$	1.65	$	1.63	$	4.47	$	4.06
Diluted earnings per share	$	1.64	$	1.63	$	4.46	$	4.04

For both the three and nine months ended September 30, 2025 and 2024, substantially all outstanding potential common shares were dilutive.

Note 5. Shareholders' Equity

The Company has a Discretionary Stock Repurchase Plan approved by the Board of Directors that authorizes management to reduce issued and outstanding common stock down to 130,000 shares. This authorization has no expiration date. During the nine months ended September 30, 2025, there were 5,286 shares repurchased at an average price of $116.10 per share, compared to 5,057 shares repurchased at an average price of $119.21 during the same period in 2024.

Accumulated other comprehensive loss consisted entirely of foreign currency translation adjustments, net of related income tax effects, for all the periods presented.

On May 6, 2025, the Board of Directors declared a semi-annual dividend of $0.77 per share payable on June 16, 2025 to shareholders of record as of June 2, 2025. On May 6, 2024, the Board of Directors declared a semi-annual dividend of $0.73 per share payable on June 17, 2024 to shareholders of record as of June 3, 2024.

Subsequent to the end of the third quarter of 2025, on November 3, 2025, the Board of Directors declared a semi-annual dividend of $0.77 per share payable on December 15, 2025 to shareholders of record as of December 1, 2025.

Note 6. Fair Value of Financial Instruments

The Company’s financial instruments, other than cash, consist primarily of cash equivalents, accounts receivable, accounts payable and accrued expenses. The carrying value of these financial instruments approximates their fair value. All highly liquid investments with a maturity of three months or less at date of purchase are considered to be cash equivalents.

Cash and cash equivalents consist of the following:


	September 30, 2025				December 31, 2024
	Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	607,945	$	607,945	$	623,561	$	623,561
Corporate commercial paper		539,906		540,338		498,185		498,742
Time deposits and money market funds		42,316		42,316		26,574		26,574
Total cash and cash equivalents	$	1,190,167	$	1,190,599	$	1,148,320	$	1,148,877

The fair value of corporate commercial paper and time deposits is based on the use of market interest rates for identical or similar assets (Level 2 fair value measurement).

Note 7. Contingencies

The Company is involved in claims, lawsuits, government investigations, income, transfer pricing and indirect tax audits and other legal matters that arise in the ordinary course of business and are subject to inherent uncertainties. Currently, in management's opinion and based upon advice from legal and tax advisors, none of these matters are expected to have a material effect on the Company's operations, cash flows or financial position. The changes in the amounts recorded for claims, lawsuits, government investigations and other legal matters are not significant to the Company's operations, cash flows or financial position. At this time, the Company is unable to estimate any additional loss or range of reasonably possible losses, if any, beyond the amounts recorded, that might result from the resolution of these matters.

Note 8. Business Segment Information

The Company is organized functionally in geographic operating segments. Accordingly, when evaluating the effectiveness of geographic segments, management focuses its attention on revenues, directly related cost of transportation and other expenses for each of the Company’s three primary sources of revenues, as well as, salaries and related costs, other operating expenses, depreciation and amortization, operating income, identifiable assets, capital expenditures and equity generated in each of these geographical areas. The President and Chief Executive Officer was determined to be the CODM, as in his capacity he is responsible for setting company strategies and initiatives, establishing company policies, allocating company resources and assessing the performance of the Company’s business segments. Operating income is the primary measure of business segments' profit or loss that is most consistent with the measurement principles of U.S.GAAP and no items below operating income are allocated to segments. The CODM uses operating income to review financial performance, progress of the Company's strategic initiatives and to determine compensation of segment managers. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin. There were no significant changes to allocate or measure expenses used to determine segment profit or loss.

Financial information regarding the Company’s operations by geographic area is as follows:

UNITED
STATES

OTHER
NORTH
AMERICA

LATIN
AMERICA

NORTH
ASIA

SOUTH
ASIA

EUROPE

MIDDLE
EAST,
AFRICA
AND
INDIA

ELIMI-
NATIONS

CONSOLI-
DATED

For the three months ended September 30, 2025:

Revenues

928,858

122,842

68,098

721,353

406,104

487,889

161,835

(2,228

)

2,894,751

Directly related cost of transportation
and other expenses1

478,767

77,749

42,337

584,631

318,614

318,393

120,771

(1,605

)

1,939,657

Salaries and related costs

275,595

21,978

11,162

41,158

29,957

91,301

19,286

—

490,437

Other operating expenses2

29,668

14,941

8,900

38,723

24,478

47,005

13,531

(631

)

176,615

Operating income

144,828

8,174

5,699

56,841

33,055

31,190

8,247

288,042

Identifiable assets at period end

2,580,473

192,957

104,334

463,689

341,607

819,342

292,545

(15,365

)

4,779,582

Capital expenditures

5,619

253

240

812

1,172

1,312

1,690

—

11,098

Depreciation and amortization

7,818

506

244

1,442

693

2,950

595

—

14,248

Equity

1,513,585

53,799

41,622

205,772

133,471

264,690

164,295

(94,596

)

2,282,638

For the three months ended September 30, 2024:

Revenues

854,679

114,264

61,981

914,417

445,308

433,660

177,145

(1,323

)

3,000,131

Directly related cost of transportation
and other expenses1

443,930

67,626

38,973

763,781

369,905

279,235

131,098

(584

)

2,093,964

Salaries and related costs

245,133

20,489

9,824

42,490

29,261

83,728

19,383

—

450,308

Other operating expenses2

8,319

14,772

8,781

44,076

22,046

43,189

13,900

(748

)

154,335

Operating income

157,297

11,377

4,403

64,070

24,096

27,508

12,764

301,524

Identifiable assets at period end

2,611,417

192,370

108,985

727,724

376,283

863,840

319,627

(29,329

)

5,170,917

Capital expenditures

9,299

198

101

296

839

1,548

—

12,291

Depreciation and amortization

8,961

569

279

1,774

502

2,819

870

—

15,774

Equity

1,628,893

35,825

42,670

221,519

124,387

182,515

164,665

(41,304

)

2,359,170

UNITED
STATES

OTHER
NORTH
AMERICA

LATIN
AMERICA

NORTH
ASIA

SOUTH
ASIA

EUROPE

MIDDLE
EAST,
AFRICA
AND
INDIA

ELIMI-
NATIONS

CONSOLI-
DATED

For the nine months ended September 30, 2025:

Revenues

2,660,632

347,455

197,391

2,053,146

1,130,212

1,360,396

470,165

(6,342

)

8,213,055

Directly related cost of transportation
and other expenses1

1,385,038

218,370

119,717

1,646,538

877,464

883,987

342,862

(4,287

)

5,469,689

Salaries and related costs

799,702

61,775

32,630

118,205

86,596

261,763

59,039

—

1,419,710

Other operating expenses2

84,075

46,495

28,559

113,289

75,880

132,242

43,574

(2,094

)

522,020

Operating income

391,817

20,815

16,485

175,114

90,272

82,404

24,690

801,636

Identifiable assets at period end

2,580,473

192,957

104,334

463,689

341,607

819,342

292,545

(15,365

)

4,779,582

Capital expenditures

20,172

736

739

5,862

3,235

4,396

4,985

—

40,125

Depreciation and amortization

24,652

1,502

748

3,674

1,885

8,387

1,851

—

42,699

Equity

1,513,585

53,799

41,622

205,772

133,471

264,690

164,295

(94,596

)

2,282,638

For the nine months ended September 30, 2024:

Revenues

2,385,392

331,837

151,787

2,096,709

960,970

1,241,432

481,600

(3,917

)

7,645,810

Directly related cost of transportation
and other expenses1

1,270,981

199,710

88,077

1,702,401

757,167

796,205

353,839

(1,728

)

5,166,652

Salaries and related costs

717,420

59,371

27,531

113,387

76,641

241,388

54,163

—

1,289,901

Other operating expenses2

55,415

43,313

22,389

111,201

58,662

122,330

37,936

(2,208

)

449,038

Operating income

341,576

29,443

13,790

169,720

68,500

81,509

35,662

740,219

Identifiable assets at period end

2,611,417

192,370

108,985

727,724

376,283

863,840

319,627

(29,329

)

5,170,917

Capital expenditures

17,775

2,172

383

933

2,938

4,860

1,354

—

30,415

Depreciation and amortization

27,087

1,601

846

3,965

1,469

8,573

2,373

—

45,914

Equity

1,628,893

35,825

42,670

221,519

124,387

182,515

164,665

(41,304

)

2,359,170

1Directly related cost of transportation and other expenses totals operating expenses from airfreight services, ocean freight and ocean services and customs brokerage and other services as shown in the condensed consolidated statements of earnings.

2Other operating expenses totals rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the consolidated statements of earnings.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Safe Harbor for Forward-Looking Statements Under Private Securities Litigation Reform Act Of 1995; Certain Cautionary Statements

Certain portions of this report on Form 10-Q including the sections entitled "Overview," "Summary of Third Quarter 2025," "Industry Trends, Trade Conditions and Competition," "Seasonality," "Critical Accounting Estimates," "Results of Operations," "Income tax expense," "Currency and Other Risk Factors" and "Liquidity and Capital Resources" contain forward-looking statements. Words such as "will likely result," "expects", "are expected to," "would expect," "would not expect," "will continue," "is anticipated," "estimate," "project," "plan," "believe," "probable," "reasonably possible," "may," "could," "should," "would," "intends," "foreseeable future" or similar expressions are intended to identify such forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, any statements that refer to projections of future financial performance, our anticipated growth and trends in the Company's businesses, signs of a slowing economy and drop in demand, future supply chain and transportation disruptions and other characterizations of disruptive events or circumstances are forward-looking statements. In addition, forward-looking statements are subject to certain risks and uncertainties, including risks associated with the impact of tariffs or other government actions on global trade volumes and economies, and tax audits and other contingencies that could cause actual results to differ materially from our historical experience and our present expectations or projections. These statements must be considered in connection with the discussion of the important factors that could cause actual results to differ materially from the forward-looking statements. Attention should be given to the risk factors identified and discussed in Part I, Item 1A in the Company’s annual report on Form 10-K filed on February 21, 2025 and in Part II, Item 1A in this report. Management believes that these forward-looking statements are reasonable as of this filing date and we do not assume any obligations to update these statements except as required by law.

Overview

Expeditors International of Washington, Inc. (herein referred to as "Expeditors," the "Company," "we," "us," "our") provides a full suite of global logistics services. Our services include air and ocean freight consolidation and forwarding, customs brokerage, warehousing and distribution, purchase order management, vendor consolidation, time-definite transportation services, temperature-controlled transit, cargo insurance, specialized cargo monitoring and tracking, and other supply chain solutions. We do not compete for overnight courier or small parcel business. As a non-asset based carrier, we do not own or operate transportation assets.

We derive our revenues by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by our customer. Each performance obligation is comprised of one or more of the Company's services. We typically satisfy our performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. Our three principal services are the revenue categories presented in our financial statements: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services. The most significant drivers of changes in gross revenues and related transportation expenses are volume, sell rates and buy rates. Volume has a similar effect on the change in both gross revenues and related transportation expenses in each of our three primary sources of revenue.

We generate the major portion of our air and ocean freight revenues by purchasing transportation services on a volume basis from direct (asset-based) carriers and then reselling that space to our customers. The rate billed to our customers (the sell rate) is recognized as revenues and the rate we pay to the carrier (the buy rate) is recognized in operating expenses as the directly related cost of transportation and other expenses. By consolidating shipments from multiple customers and concentrating our buying power, we are able to negotiate favorable buy rates from the direct carriers, while at the same time offering lower sell rates than customers would otherwise be able to negotiate themselves.

In most cases, we act as an indirect carrier. When acting as an indirect carrier, we issue a House Air Waybill (HAWB), a House Ocean Bill of Lading (HOBL) or a House Sea Waybill to customers as the contract of carriage. In turn, when the freight is physically tendered to a direct carrier, we receive a contract of carriage known as a Master Air Waybill for airfreight shipments and a Master Ocean Bill of Lading for ocean shipments.

Customs brokerage and other services involve providing services at destination, such as helping customers clear shipments through customs by preparing and filing required documentation, calculating, and providing for payment of duties and other taxes on behalf of customers as well as arranging for any required inspections by governmental agencies, and import services such as arranging for local pick up, storage and delivery at destination. These are complicated functions requiring technical knowledge of customs rules and regulations in the multitude of countries in which we have offices. We also provide other value-added services at destination, such as warehousing and distribution, time-definitive transportation services and consulting.

We manage our company along geographic areas of responsibility: Americas; North Asia; South Asia; Europe; and Middle East, Africa and India (MAIR). Each area is divided into sub-regions that are composed of operating units with individual profit and loss responsibility. Our business involves shipments between operating units and typically touches more than one geographic area. The nature of the international logistics business necessitates a high degree of communication and cooperation among operating units. Because of this inter-relationship between operating units, it is very difficult to examine any one geographic area and draw meaningful conclusions as to its contribution to our overall success on a stand-alone basis.

Our operating units share revenue using the same arms-length pricing methodologies that we use when our offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin. Our strategy closely links compensation with operating unit profitability, which includes shared revenues and allocated costs. Therefore, individual success is closely linked to cooperation with other operating units within our network. The mix of services varies by segment based primarily on the import or export orientation of local operations in each of our regions.

Summary of Third Quarter 2025

The significant impacts are discussed within “Results of Operations” and summarized below.

•

Revenues declined 4% as a significant drop in ocean services was largely offset by growth in our other services.

•

Revenue from ocean freight and other services decreased 27% due to significant decreases in average ocean sell rates and buy rates and a 3% decline in ocean containers shipped. Demand for ocean services declined after U.S. importers accelerated shipments in anticipation of trade tariffs changes earlier in the year.

•

Customs brokerage and other services and airfreight services revenues increased 13% and 3%, respectively.

•

Growing complexity in customs brokerage due to the dynamic trade environment has resulted in high demand for our brokerage services resulting in growth in revenues from customs declarations fees, as well as increases in the resources to support that activity.

•

Airfreight services, road freight and warehousing and distribution services (included with customs brokerage and other services) all benefited from strong demand from our technology customers investing in artificial intelligence infrastructure.

•

Operating income decreased 4% and net earnings to shareholders decreased 3%, as compared to the third quarter of 2024.

•

Earnings per share increased 1% to $1.64.

•

Cash from operating activities was $201 million, up from $90 million in the third quarter of 2024.

•

We returned $212 million to shareholders through common stock repurchases.

Industry Trends, Trade Conditions and Competition

We operate in over 60 countries in the competitive global logistics industry and our activities are closely tied to the global economy. International trade is influenced by many factors, including economic and political conditions in the United States and abroad, currency exchange rates, laws and policies relating to tariffs, trade restrictions, foreign investment and taxation. Periodically, governments consider changes to tariffs, impose trade restrictions and accords. Currently, the United States Government has undertaken a substantial global trade rebalancing effort resulting in significantly higher tariffs on imports. Increased tariffs on certain sectors for Canada, China, and Mexico took effect in the first quarter of 2025. Additionally, reciprocal tariffs on certain countries were expected to take effect in April 2025, and were later postponed to July and August 2025, while trade negotiations by country were taking place. In the third quarter additional tariffs were imposed on imports from most countries including India, Brazil, and Japan. The United States has also imposed significantly higher tariffs on goods made in China. Additionally, sectoral tariffs on steel, aluminum and their derivative products, as well as investigations were launched on other commodities since the second quarter of 2025. These measures have led to threatened or actual retaliatory tariffs and trade actions from several countries, including China and Canada. The "de minimis" exemption, which exempted goods made in China and Hong Kong of less than $800 in commercial value from tariffs and entry submission, was terminated on May 2, 2025, and expanded to all countries on August 29, 2025. The potential for further tariff changes and trade restrictions remains high, creating an unpredictable environment for international trade. Changes in import and export regulations may further impact the flow of trade and the global economy. We cannot predict how changes in tariffs and trade restrictions will affect our business. As governments impose import and export restrictions, shippers may adjust their sourcing patterns on a temporary or longer-term basis and potentially shift manufacturing to other countries over time. Additionally, the constant changes in trade regulations since the beginning of 2025 are adding complexity to the customs declarations process, making compliance with regulations increasingly challenging.

Doing business in foreign locations also subjects us to a variety of risks and considerations not normally encountered by domestic enterprises. In addition to being influenced by governmental policies and inter-governmental disputes concerning international trade, our business may also be negatively affected by political developments and changes in government personnel or policies in the United States and other countries, as well as economic turbulence, political unrest and security concerns in the nations and on the trade shipping routes in which we conduct business. The future impact that these events may have on international trade, oil prices and security costs is uncertain. We do not have employees, assets, or operations in Russia, Ukraine, Israel, the Gaza Strip or the West Bank. While limited, any shipment activity is conducted with independent agents in those countries in compliance with all applicable trade sanctions, laws and regulations. We have a branch and employees in Lebanon but no significant assets.

Our ability to provide services to our customers is highly dependent on good working relationships with a variety of entities, including airlines, ocean carrier lines and ground transportation providers, as well as governmental agencies. We select and engage with best-in-class, compliance-focused, efficiently run, growth-oriented partners, based upon defined value elements and are intentional in our relationship and performance management activity. We consider our current working relationships with these entities to be satisfactory. However, changes in the financial stability; operating capabilities, and the capacity of asset-based carriers; capacity allotments available from carriers; governmental regulation or deregulation efforts; modernization of the regulations governing customs brokerage; and/or changes in governmental restrictions, quota restrictions or trade accords could affect our business in unpredictable ways. When the market experiences seasonal peaks or any sort of disruption, the carriers often increase their pricing suddenly. This carrier behavior creates pricing volatility that could impact Expeditors' ability to maintain historical unitary profitability.

The global economic and trade environments remain highly uncertain; including inflation remaining higher than historical levels, volatility in oil prices, high interest rates and the conflicts in the Middle East and Ukraine. In the first quarter of 2025, we saw high demand on exports out of Asia and continued to see high demand on exports out of South Asia in the second quarter 2025, resulting in high average sell and buy sell rates where demand exceeded carrier capacity. However, softening demand and additional available capacity for ocean freight resulted in declines in ocean sell and buy rates starting in the second quarter. Additional ocean and air transportation capacity will become available if demand softens due to uncertainty in economic and trade regulations and safe passage through the Red Sea resumes. These conditions could result in declines in average sell and buy rates. We also expect that pricing volatility will continue as carriers adapt to changes in demand, changing fuel prices, available capacity, security risks and react to governmental trade policies and other regulations. Additionally, we cannot predict the direct or indirect impact that further changes in purchasing behavior, such as the evolution of international direct e-commerce platforms, could have on our business. Some customers are relocating manufacturing to other countries to mitigate the impact of higher tariffs on imports, reduce their supply chain risks, address disruptions caused by pandemics and geopolitical issues. These changes could negatively affect our business.

Seasonality

Historically, our operating results have been subject to seasonal demand trends with the first quarter being the weakest and the third and fourth quarters being the strongest; however, there is no assurance that this seasonal trend will occur in the future or to what degree it will be impacted by an uncertain economy. This historical pattern has been the result of, or influenced by, numerous factors, including weather patterns, national holidays, consumer demand, new product launches, just-in-time inventory models, economic conditions, pandemics, governmental policies, inter-governmental disputes and a myriad of other similar and subtle forces.

A significant portion of our revenues is derived from customers in the retail and technology industries whose shipping patterns are tied closely to consumer demand, as well as the scaling of AI infrastructure, and from customers in industries whose shipping patterns are dependent upon just-in-time production schedules. Therefore, the timing of our revenues is, to a large degree, impacted by factors out of our control, such as a sudden change in consumer demand for retail goods, changes in trade tariffs, product launches, disruptions in supply chains and/or manufacturing production delays. Additionally, many customers ship a significant portion of their goods at or near the end of a quarter and, therefore, we may not learn of a shortfall in revenues until late in a quarter.

To the extent that a shortfall in revenues or earnings was not expected by securities analysts or investors, any such shortfall from levels predicted by securities analysts or investors could have an immediate and adverse effect on the trading price of our stock. We cannot accurately forecast many of these factors, nor can we estimate accurately the relative influence of any particular factor and, as a result, there can be no assurance that historical patterns will continue in future periods.

Critical Accounting Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and judgments. We base our estimates on historical experience and on assumptions that we believe are reasonable. Our critical accounting estimates are discussed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our annual report on Form 10-K for the year ended December 31, 2024, filed on February 21, 2025 to the critical accounting estimates previously disclosed in that report.

Results of Operations

The following table shows the revenues, directly related cost of transportation and other expenses for our principal services and our overhead expenses for the three and nine months ended September 30, 2025 and 2024, including the respective percentage changes comparing 2025 and 2024.

The table and the accompanying discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes thereto in this quarterly report.


	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2025		2024		Percentage change	2025		2024		Percentage change
Airfreight services:
Revenues	$	1,020,258	$	986,950	3%	$	2,873,805	$	2,606,647	10%
Expenses		766,783		740,356	4		2,113,679		1,923,115	10
Ocean freight services and ocean services:
Revenues		746,120		1,017,618	(27)		2,203,567		2,240,079	(2)
Expenses		542,304		783,827	(31)		1,599,680		1,675,931	(5)
Customs brokerage and other services:
Revenues		1,128,373		995,563	13		3,135,683		2,799,084	12
Expenses		630,570		569,781	11		1,756,330		1,567,606	12
Overhead expenses:
Salaries and related costs		490,437		450,308	9		1,419,710		1,289,901	10
Other		176,615		154,335	14		522,020		449,038	16
Total overhead expenses		667,052		604,643	10		1,941,730		1,738,939	12
Operating income		288,042		301,524	(4)		801,636		740,219	8
Other income, net		10,131		10,890	(7)		30,387		41,298	(26)
Earnings before income taxes		298,173		312,414	(5)		832,023		781,517	6
Income tax expense		75,095		82,488	(9)		220,927		206,040	7
Net earnings		223,078		229,926	(3)		611,096		575,477	6
Less net earnings attributable to the noncontrolling interest		822		352	134		1,471		1,282	15
Net earnings attributable to shareholders	$	222,256	$	229,574	(3)%	$	609,625	$	574,195	6%

Airfreight services:

Airfreight services revenues and expenses increased 3% and 4%, respectively, during the three months ended September 30, 2025, as compared with the same period in 2024, due to a 4% increase in tonnage, partially offset by 2% and 1% decreases in average sell and buy rates, respectively. Airfreight services revenues and expenses both increased 10%, respectively, during the nine months ended September 30, 2025, as compared with the same period in 2024, due to a 6% increase in tonnage and 4% increases in both the average sell and buy rates, respectively.

Tonnage increased on exports from North Asia and South Asia during the three and nine months ended September 30, 2025, as compared with the same periods in 2024, as a result of increased market demand, in part from technology customers investing in artificial intelligence infrastructure.

Average sell and buy rates decreased during the three months ended September 30, 2025 on exports out of North Asia and South Asia. Imbalances between demand and capacity in 2024 and in the first half of 2025 eased in the third quarter of 2025, as additional capacity became available due to a drop in demand from direct e-commerce and fewer shippers accelerating orders in anticipation of higher tariffs. The elimination of the low-value de minimis exemption on shipments from China to the U.S. resulted in a decrease in demand for airfreight, allowing carriers to redistribute capacity to high demand routes, resulting in lower rates. For the nine months ended September 30, 2025, average sell and buy rates increased in North Asia and Europe due to high demand in the first part of the year from shippers accelerating orders in anticipation of higher tariffs on U.S. imports.

Seasonal changes in demand, impact from disruptions in the ocean market due to security concerns and variable demand for airfreight capacity from direct e-commerce business could cause volatility in average buy rates on certain routes. Additionally, geopolitical concerns, inter-governmental trade disputes, new tariffs on imports into the U.S. and retaliatory actions from other countries create uncertainty in the economy and the trade environment. As shippers and carriers react to these volatile conditions, it may negatively affect demand for airfreight services, which could significantly reduce our volumes and average sell and buy rates in the coming quarters. Though we are unable to predict how these uncertainties and any future disruptions may affect our operations or financial results prospectively, these conditions could result in significant decreases in our revenues and operating income.

Ocean freight and ocean services:

Ocean freight and ocean services consists of three basic services: ocean freight consolidation, order management and direct ocean forwarding. Ocean freight and ocean services revenues and expense decreased 27% and 31%, respectively, for the three months ended September 30, 2025 and 2% and 5%, respectively, for the nine months ended September 30, 2025 as compared with the same periods in 2024. The largest component of our ocean freight and ocean services revenue is derived from ocean freight consolidation, which represented 68% and 70% of ocean freight and ocean services revenue for the nine months ended September 30, 2025 and 2024, respectively.

Ocean freight consolidation revenues and expense decreased 35% and 38%, respectively, for the three months ended September 30, 2025, as compared with the same period in 2024, primarily due to 33% and 36% decreases in average sell and buy rates and a 3% decrease in containers shipped primarily from retail customers. Ocean freight consolidation revenues and expenses decreased 5% and 8%, respectively, for the nine months ended September 30, 2025, as compared with the same period in 2024, primarily due to 8% and 11% decreases in average sell and buy rates, offset by a 4% increase in containers shipped. The declines in average buy rates and sell rates are due to a softening demand primarily on exports out of Asia and an increase in available carrier capacity. This decline could continue for the remainder of 2025 and beyond if demand softens and additional vessels are brought into service.

North Asia ocean freight and ocean services revenues decreased 43% and 13%, respectively, and expenses decreased 46% and 16% driven by lower volumes and average rates. Containers shipped out of North Asia region decreased 12% and 3%, respectively for the three and nine months ended September 30, 2025 while they increased for other regions. This was mainly due to customers relocating sourcing out of China to other regions and softening of the retail sector.

South Asia ocean freight and ocean services revenues and expenses decreased 23% and 28%, respectively, for the three months ended September 30, 2025, while they increased 10% and 7%, respectively, for the nine months ended September 30, 2025. The decreases in the third quarter are due to declining average sell and buy rates compared to a strong first half of 2025 when customers front loaded shipments in anticipation of higher tariffs.

Order management revenues and expenses decreased 7%, and 9%, respectively, for the three months ended September 30, 2025, while they both increased 7% respectively, for the nine months ended September 30, 2025, compared to the same periods in 2024 due to loss of volumes in the third quarter, mainly in the North Asia region as customers slowed down ordering or shifted sourcing given the uncertainty of U.S. tariff changes.

Direct ocean freight forwarding revenues increased 3% and 5%, respectively, for the three and nine months ended September 30, 2025, and expenses increased 5% and 7% principally due to higher ancillary services in the United States and Europe.

The global economic and trade environment are increasingly uncertain and dynamic, with increases in trade tariffs and inter-governmental disputes. As shippers and carriers reacted to these volatile conditions, it negatively affected demand, which reduced our volumes and average sell and buy rates. Further, carriers have added new vessels which increased capacity and substantially decreased average sell and buy rates. While some volumes are shifting to other routes and as customers look to mitigate their exposure to U.S./China-specific tariffs, it is too early to know what the overall impact on volumes might be. If safe passage through the Red Sea resumes, additional capacity will become available due to shorter transit times. These conditions could further depress sell and buy rates and cause further decreases in our revenues and operating income.

Customs brokerage and other services:

Customs brokerage and other services revenues increased 13% and 12% and expenses increased 11% and 12% for the three and nine months ended September 30, 2025, respectively, as compared with the same periods in 2024. These changes are primarily due to increases in customs clearances, import services, road freight and warehousing and distribution from higher shipment volumes, principally from shipments into North America and Europe.

North America revenues increased 13% and expenses increased 12% for both three and nine months ended September 30, 2025, respectively, as compared with the same period in 2024. Europe revenues and expenses increased 19% and 20%, respectively, for the three months ended September 30, 2025, and 13% and 16%, respectively, for the nine months ended September 30, 2025, respectively, as compared with the same period in 2024.

Import services, including charges at ports such as detention, drayage, terminal charges and delivery increased significantly in 2025 because of higher volumes in part from shippers front loading deliveries in anticipation of higher tariffs. Road freight and warehousing and distribution services benefited from high demand from our technology customers.

Customers value our brokerage services due to an increasingly dynamic and complex trade environment, and its impact on the declaration process. They seek knowledgeable customs brokers with sophisticated systems capabilities critical to an overall logistics management program that are necessary to rapidly respond to changes in the regulatory and security environment. Should international trade slow, lower volumes and pricing could significantly reduce our revenues and operating income.

Overhead expenses:

Salaries and related costs increased 9% for the three months ended September 30, 2025 as compared with the same periods in 2024, principally due to a 7% increase in headcount, and increases in base salaries and benefits, partially offset by decreases in incentive compensation commensurate with lower operating income. For the nine months ended September 30, 2025 salaries and related costs increased 10%, principally due to a 7% increase in headcount and increases in base salaries and benefits. Headcount increased in 2025 compared to 2024, primarily in our operations and information technology. We hired employees in operations to support the added complexity and higher demand for customs brokerage services, primarily in North America, and support the growth in volumes transacted in certain services and regions such as South Asia, Europe and Latin America. We also continued to hire IT personnel to support essential investments which further strengthens our critical information systems.

Historically, the relatively consistent relationship between salaries and operating income has been the result of a compensation philosophy that has been maintained since the inception of our company: offer a modest base salary and the opportunity to share in a fixed and determinable percentage of the operating profit of the business unit controlled by each key employee. Using this compensation model, changes in individual incentive compensation occur in proportion to changes in our operating income, creating an alignment between branch and corporate performance and shareholder interests.

Our management compensation programs have always been incentive-based and performance driven. Total bonuses to field and executive management for the nine months ended September 30, 2025, increased 10%, respectively, when compared to the same period in 2024, primarily due to higher operating income.

Generally, no management bonuses can be paid unless the relevant business unit is profitable. Any operating losses must be offset in their entirety by operating profits before management is eligible for a bonus. Executive management, in limited circumstances, makes exceptions at the branch operating unit level. Since the most significant portion of management compensation comes from the incentive bonus programs, we believe that this cumulative feature is a disincentive to excessive risk taking by our managers. The outcome of any higher risk transactions, such as overriding established credit limits, would be known in a relatively short time frame. Management believes that when the potential and certain impact on the bonus is fully considered in light of the short operating cycle of our services, the potential for short-term gains that could be generated by engaging in risky business practices is sufficiently mitigated to discourage excessive and inappropriate risk taking. Management believes that both the stability and the long-term growth in revenues, operating income and net earnings are a result of the incentives inherent in our compensation programs.

Other overhead expenses increased 14% and 16% for the three and nine months ended September 30, 2025, respectively, as compared with the same periods in 2024. This increase is primarily due to technology related expenses, increased consulting, and higher rental and occupancy expenses. Additionally, for the nine months ended September 30, 2025, we incurred higher expenses related to indirect tax contingencies.

We expect to continue to enhance security and internal controls over our technology and systems and plan to deploy additional solutions which will result in increased expenses in the future. We will also continue to make important investments in people, processes and technology, as well as to invest in our strategic efforts to drive organic growth.

Income tax expense:

Our consolidated effective income tax rate was 25.2% and 26.6% for the three and nine months ended September 30, 2025, as compared to 26.4% in both comparable periods of 2024. The decrease during the three months ended September 30, 2025 was principally from an increase in Foreign-derived intangible income (FDII) deductions. All periods benefited from U.S. income tax deductions for FDII as well as available U.S. Federal foreign tax credits principally from withholding taxes related to our foreign operations. We have not incurred any significant expenses for any period presented for either the 15% corporate alternative minimum tax, nor for the global minimum tax regime (also known as Pillar Two).

On July 4, 2025, the United States enacted into law the 2025 Tax Act. The 2025 Tax Act provides for several corporate tax changes including, but not limited to, restoring an election to recognize full expensing of domestic research and development costs, restoring immediate deductibility of certain capital expenditures, and changes to the computations of U.S. taxation on international earnings. We are in the process of evaluating the provisions of the 2025 Tax Act, including which elections we may or may not make. While we expect that the 2025 Tax Act may have a positive impact on consolidated tax expense and cash flows, we do not expect it to be material. Elements of the enacted tax laws and regulations could be impacted by further legislative action as well as additional interpretations and guidance issued by the Internal Revenue Service or Treasury and by similar governmental bodies in jurisdictions outside of the U.S. Such changes could impact the estimates of the amounts the Company has recorded.

Currency and Other Risk Factors

The nature of our worldwide operations necessitates transacting in a multitude of currencies other than the U.S. dollar. That exposes us to the inherent risks of volatile international currency markets and governmental interference. Some of the countries where we maintain offices and/or have agency relationships maintain strict currency control regulations that influence our ability to hedge foreign currency exposure. Historically, derivative financial instruments have not been used to manage foreign currency risk. In lieu of the use of foreign currency derivatives we instead try to compensate for these exposures by accelerating international currency settlements among our offices and agents. In the future, we may enter into foreign currency hedging transactions to manage our foreign currency risk. There are also regulatory or commercial limitations on our ability to move money freely, which could be impacted by inter-governmental disputes or new trade restrictions. We had no foreign currency derivatives outstanding at September 30, 2025 and December 31, 2024. For the three months ended September 30, 2025, net foreign currency transactional losses were approximately $3 million compared to net foreign currency losses of approximately $11 million in the same period in 2024. During the nine months ended September 30, 2025, net foreign currency transactional losses were approximately $20 million compared to net foreign currency transactional gains of less than $1 million in the same period in 2024.

Historically, our business has not been adversely affected by inflation. Beginning in 2021 and continuing through 2025, many countries including the United States experienced increasing levels of inflation. As a result, our business continues to experience rising labor costs, service provider rate increases, higher rent and occupancy and other expenses. Due to the high degree of competition in the marketplace we may not be able to increase our prices to our customers to offset this inflationary pressure, which could lead to an erosion in our margins and operating income in the future. Conversely, raising our prices to keep pace with inflationary pressure may result in a decrease in volume and customer demand for our services. As we are not required to purchase or maintain extensive property and equipment and have not otherwise incurred substantial interest rate-sensitive indebtedness, we currently have limited direct exposure to increased interest expense resulting from increases in interest rates.

There is uncertainty as to how future regulatory requirements and volatility in oil prices will continue to impact future buy rates. Because fuel is an integral part of carriers' costs and impacts both our buy rates and sell rates, we would expect our revenues and costs to be impacted as carriers adjust rates for the effect of changing fuel prices. To the extent that future fuel prices increase, and we are unable to pass through the increase to our customers, fuel price increases could adversely affect our operating income.

Liquidity and Capital Resources

Our principal source of liquidity is cash and cash equivalents and cash generated from operating activities. Net cash provided by operating activities for the three and nine months ended September 30, 2025 was $201 million and $723 million as compared with $90 million and $474 million for the same periods in 2024. The increases of $111 million and $249 million for the three and nine months ended September 30, 2025, were primarily due changes in working capital. At September 30, 2025, working capital was $1,627 million, including cash and cash equivalents of $1,190 million. Other than our recorded lease liabilities, we had no long-term obligations or debt at September 30, 2025. Management believes that our current cash position and operating cash flows will be sufficient to meet our capital and liquidity requirements for at least the next 12 months and thereafter for the foreseeable future, including meeting any contingent liabilities related to standby letters of credit and other obligations.

As a customs broker, we make significant short-term cash advances for a select group of our credit-worthy customers. These cash advances are for customer obligations such as the payment of duties and taxes to customs authorities in various countries throughout the world. Higher duty rates have resulted in increases in the amounts we advance on behalf of our customers. Given the short time frame until we are reimbursed, we do not expect these outlays to have a significant effect on our liquidity. Cash advances are a “pass through” and are not recorded as a component of revenue and expense, except for fees associated with this service charged to customers. The billings of such advances to customers are accounted for as a direct increase in accounts receivable from the customer and a corresponding increase in accounts payable to governmental customs authorities. As a result of these “pass through” billings, the conventional Days Sales Outstanding or DSO calculation does not directly measure collection efficiency.

For customers that meet certain criteria, we have agreed to extend payment terms beyond our customary terms. Management believes that it has established effective credit control procedures and historically has experienced relatively insignificant collection problems.

Our business historically has been subject to seasonal fluctuations, and this is expected to continue in the future. Cash flows fluctuate as a result of this seasonality. Historically, the first quarter shows an excess of customer collections over customer billings. This results in positive cash flow. The increased activity associated with periods of higher demand (typically commencing late second or early third quarter and continuing well into the fourth quarter) causes an excess of customer billings over customer collections. This cyclical growth in customer receivables consumes available cash. However, there is no assurance that this seasonal trend will occur in the future.

Cash used in investing activities for the three and nine months ended September 30, 2025 was $10 million and $39 million as compared with $13 million and $30 million for the same periods in 2024, primarily for capital expenditures. Capital expenditures in the three and nine months ended September 30, 2025 were primarily related to continuing investments in building and leasehold improvements, technology and equipment. Total anticipated capital expenditures in 2025 are currently estimated to be approximately $60 million. This includes routine capital expenditures, leasehold and building improvements and investments in technology.

Cash used in financing activities during the three and nine months ended September 30, 2025 was $150 million and $655 million as compared with $76 million and $659 million for the same periods in 2024. We use the proceeds from stock option exercises, employee stock purchases and available cash to repurchase our common stock on the open market to reduce outstanding shares. During the three and nine months ended September 30, 2025, we used cash to repurchase 1.8 million and 5.3 million shares of common stock, compared to 1.2 million and 5.1 million shares of common stock during the same periods in 2024.

We follow established guidelines relating to credit quality, diversification and maturities of our investments to preserve principal and maintain liquidity. Historically, our investment portfolio has not been adversely impacted by disruptions occurring in the credit markets. However, there can be no assurance that our investment portfolio will not be adversely affected in the future.

We cannot predict what further impact ongoing uncertainties in the global economy, inflation, future interest rates, and political conflicts and uncertainty, may have on our operating results, freight volumes, pricing, amounts advanced on behalf of our customers, changes in consumer demand, carrier stability and capacity, customers’ abilities to pay or changes in competitors' behavior.

We maintain international unsecured bank lines of credit for short-term working capital purposes. A few of these credit lines are supported by standby letters of credit issued by a United States bank or guarantees issued by the Company to the foreign banks issuing the credit line. At September 30, 2025, borrowings under these credit lines were $36 million and we were contingently liable for $80 million from standby letters of credit and guarantees. The standby letters of credit and guarantees primarily relate to obligations of our foreign subsidiaries for credit extended in the ordinary course of business by direct carriers, primarily airlines, and for duty and tax deferrals available from governmental entities responsible for customs and value-added-tax (VAT) taxation. The total underlying amounts due and payable for transportation and governmental excises are properly recorded as obligations in the accounting records of the respective foreign subsidiaries, and there would be no need to record additional expense in the unlikely event the parent company is required to perform.

We have lease arrangements primarily for office and warehouse space in all districts where we conduct business. As of September 30, 2025, we had fixed lease payment obligations of $724 million, with $143 million payable within 12 months.

We typically enter into unconditional purchase obligations with asset-based providers (generally short-term in nature) reserving space on a guaranteed basis. The pricing of these obligations varies to some degree with market conditions. We only enter into agreements that management believes we can fulfill. In the regular course of business, we also enter into agreements with service providers to maintain or operate equipment, facilities or software that can be longer than one year. We also regularly have contractual obligations for specific projects related to improvements of our owned or leased facilities and information technology infrastructure. Purchase obligations outstanding as of September 30, 2025 totaled $274 million.

Our foreign subsidiaries regularly remit dividends to the U.S. parent company after evaluating their working capital requirements and funds necessary to finance local capital expenditures. In some cases, our ability to repatriate funds from foreign operations may be subject to foreign exchange controls or could be impacted by inter-governmental disputes or new trade restrictions. At September 30, 2025, cash and cash equivalent balances of $515 million were held by our non-United States subsidiaries, of which $18 million was held in banks in the United States. Earnings of our foreign subsidiaries are not considered to be indefinitely reinvested outside of the United States.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the ordinary course of our business. These risks are primarily related to foreign exchange risk and changes in short-term interest rates. The potential impact of our exposure to these risks is presented below:

Foreign Exchange Risk

We conduct business in many different countries and currencies. Our business often results in billings issued in a country and currency that differs from that where the expenses related to the service are incurred. In the ordinary course of business, we create numerous intercompany transactions and may have receivables, payables and currencies that are not denominated in the local functional currency. This brings foreign exchange risk to our earnings. The principal foreign exchange risks to which Expeditors is exposed include Chinese Yuan, Indian Rupee, Euro, Mexican Peso, Canadian Dollar, British Pound and Vietnamese Dong.

Most of our subsidiaries operate in functional currencies other than the U.S. dollar. The translation of foreign subsidiaries' non-US denominated balance sheets and income statements into U.S. dollar for consolidated reporting, results in a cumulative translation adjustment to accumulated other comprehensive loss within shareholders' equity.

Foreign exchange rate translation sensitivity analysis can be quantified by estimating the impact on our earnings as a result of hypothetical changes in the value of the U.S. dollar, our functional currency, relative to the other currencies in which we transact business. All other things being equal, an average 10% weakening of the U.S. dollar, throughout the nine months ended September 30, 2025, would have had the effect of raising operating income by approximately $46 million. An average 10% strengthening of the U.S. dollar, for the same period, would have the effect of reducing operating income by approximately $38 million. This analysis does not take into account changes in shipping patterns based upon this hypothetical currency fluctuation. For example, a weakening in the U.S. dollar would be expected to increase exports from the United States and decrease imports into the United States over some relevant period of time, but the exact effect of this change cannot be quantified without making speculative assumptions.

Historically, derivative financial instruments have not been used to manage foreign currency risk. For the three and nine months ended September 30, 2025, net foreign currency transactional losses were approximately $3 million and $20 million compared to net foreign currency transactional losses of approximately $11 million and gains of less than $1 million during the same periods in 2024. In lieu of the use of foreign currency derivatives, we instead follow a policy of accelerating international currency settlements to manage foreign exchange risk relative to intercompany billings. As of September 30, 2025, we had approximately $132 million of net unsettled intercompany transactions. The majority of intercompany billings are resolved within 30 days.

Interest Rate Risk

At September 30, 2025, we had cash and cash equivalents of $1,190 million of which $582 million was invested at various short-term market interest rates. We had no long-term debt at September 30, 2025. A hypothetical change in the interest rate of 10 basis points at September 30, 2025 would not have a significant impact on our earnings. In management’s opinion, there has been no material change in our interest rate risk exposure in the third quarter of 2025.

Item 4. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report due to material weaknesses in internal control over financial reporting described below.

Management concluded that unauthorized access and changes to databases and related applications could have gone undetected as controls to review and authorize access and direct changes that support several key operational and accounting systems excluded certain changes from review or were not captured, and as such were either not designed properly or did not operate effectively as designed. In addition, the system logic used to record direct changes excluded certain changes from being captured for review. These control deficiencies related to personnel without specific training and experience to fulfill internal control responsibilities related to information technology general controls over systems and processes resulting in an ineffective design of controls necessary to ensure the reliability of information used in financial reporting. As a consequence of these control deficiencies, the Company concluded that it did not effectively design, implement and operate process-level controls across its financial reporting processes.

In light of the material weaknesses, management performed additional analysis and other procedures to ensure that our consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). Accordingly, management believes that the consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S. GAAP.

Remediation

As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2024, with respect to the material weaknesses identified, management with the oversight of the Audit Committee of the Board of Directors, has taken steps to remediate such material weaknesses, including:

•

Engaged PwC US Consulting, LLP to assist management with our entity-wide risk assessment, assessment of control design, and remediation process;

•

Maintained a continuous process of ongoing entity wide risk assessments to identify relevant process risk points, IT systems and the information used in the operation of controls;

•

Hired additional qualified personnel to support the remediation process and the design and implementation of IT controls;

•

Implemented additional third-party developed software solutions that aid in tracking changes to databases and related applications and improve controls over system access and monitoring;

•

Implemented certain systems, procedures and controls designed to strengthen IT change management and logical access processes; and

•

Conducted ongoing training of personnel to fulfill internal control responsibilities relative to information technology.

Management believes the implementation of the remediation measures described above have strengthened the overall internal control over financial reporting. At this time, management is not aware of any additional measures that are needed to remediate the material weaknesses, but further testing may identify items which still require management’s attention. These material weaknesses will not be considered fully remediated until the applicable controls operate for a sufficient period and management has concluded, through additional testing, that these controls are operating effectively. Accordingly, management has determined that these material weaknesses have not been fully remediated as of September 30, 2025. We continued to perform certain supplemental review procedures for direct database changes and other procedures to supplement our existing controls to ensure that our consolidated financial statements are prepared in accordance with U.S. GAAP. As we continue to evaluate and work to enhance our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify some of the remediation measures described above.

The Audit Committee's oversight of ongoing actions being taken by management to remediate and strengthen information technology controls includes monthly reports and formal comprehensive presentations at all Audit Committee meetings from the Chief Information Officer and Chief Information Security Officer.

Changes in Internal Controls

Except for on-going remediation related to the material weaknesses noted above, there were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

An internal control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance that all of our control issues and instances of fraud, if any, have been detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Expeditors is involved in claims, lawsuits, government investigations, income, transfer pricing and indirect tax audits and other legal matters that arise in the ordinary course of business and are subject to inherent uncertainties. Currently, in management's opinion and based upon advice from legal and tax advisors, none of these matters are expected to have a material effect on our operations, cash flows or financial position. As of September 30, 2025, the amounts recorded for claims, lawsuits, government investigations and other legal matters are not significant to our operations, cash flows or financial position. At this time, we are unable to estimate any additional loss or range of reasonably possible losses, if any, beyond the amounts recorded, that might result from the resolution of these matters.

Item 1A. Risk Factors

In addition to the other information set forth in this report, careful consideration should be given to the risk factors under Item 1A Risk Factors in our Annual Report on Form 10-K filed on February 21, 2025. There have been no material changes in Expeditors' risk factors from those disclosed under Item 1A Risk Factors in our annual report on Form 10-K filed on February 21, 2025, except for the following:

Industry Risks

The current volatile international trade environment as a result of intergovernmental disputes, trade actions, increased tariffs and other geo-political risks may adversely impact our business and operating results.

The United States has undertaken a substantial global tariff rebalancing effort, resulting in higher tariffs on imports, including significantly higher tariffs on goods made in China and sectoral tariffs on a range of materials and products. These measures led to threatened or actual retaliatory tariffs on goods made in the United States from several countries, including China and Canada. This created an unpredictable trade environment for shippers to determine if and how to adapt their sourcing patterns given these new and fast-changing regulations. If these conditions result in a significant, short-term or longer-term, decrease or redistribution of international trade volumes, it could negatively affect our business volumes and revenues. Expeditors' activity is particularly exposed to trade volume impacts from trade actions and tariff disputes between China and the United States, as we generated 22% of our revenues and 17% of our operating income in 2024, on exports from China and Hong Kong; these amounts are trending lower in 2025. Uncertainty and changes to trade volumes could also affect air and ocean freight carriers because they may adjust capacity and transportation schedules, which could result in volatility in available capacity, and average sell and sell rates, all of which could adversely impact our operations and financial results. While some of those volumes are shifting to other routes, as customers look to mitigate their exposure to China-specific tariffs, it is too early to know what the overall decline in volumes might be. Many of our customers are subject to the increased tariffs and may experience increased costs of conducting business. This could result in a loss of business, bad debt or increased expenses in the future if our customers were to abandon cargo, enter into bankruptcy or insolvency proceedings, or their ability to pay deteriorates. Additionally, the increased complexity of trade regulations and customs declaration processes challenges our ability to be in compliance with such ever-changing regulations and may require us to dedicate additional resources to our customs brokerage operations.

Government Regulation and Tax Risks

We are subject to taxation in multiple jurisdictions, and although we believe our tax estimates are reasonable, any adverse determinations in tax audits could negatively impact our financial results.

Expeditors is subject to income and non-income taxation in the United States (Federal, state and local) as well as many foreign jurisdictions including the People’s Republic of China, including Hong Kong, Taiwan, Vietnam, India, Mexico, Canada, Netherlands, the United Kingdom and many other jurisdictions. In many of these jurisdictions, the tax laws are very complex and are open to different interpretations and application. Tax authorities frequently implement new taxes, including the 2025 Tax Act enacted in July of 2025 in the U.S, and change their tax rates and rules, including interpretations of those rules. The Organization for Economic Cooperation and Development (OECD) reached agreement among various countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two proposals. 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 cannot be determined at this time.

The timing of the resolution of income and non-income tax examinations can be highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities, may differ significantly from the amounts recorded. It is reasonably possible that within the next twelve months we will undergo further audits and examinations by various tax authorities and may reach resolution related to income tax examinations covering one or more jurisdictions and years. In recent years, the United States and other foreign governments have made significant changes to tax laws, and more changes are anticipated in future periods. Often, those changes are subject to the issuance of new regulations and interpretations, which adds complexity and uncertainty in calculating tax liabilities.

We are regularly under audit by tax authorities, including transfer pricing inquiries. The Indian tax authority (ITA) has asserted that additional tax applies principally related to transfer pricing and transactions between and amongst the Company and its Indian subsidiary and the applicability to an Indian service tax applicable to ocean and air imports and exports. We believe that ITA’s positions are without merit, and we have thus far been successful in defending our position vigorously in Indian courts. However, if these matters are adversely resolved, we would recognize significant additional tax expense including interest and penalties. Although we believe our tax estimates are reasonable, the final determination of tax audits, including any potential penalties and interest, could be materially different from our tax provisions and accruals and negatively impact our financial results. We cannot currently provide an estimate of the range of possible outcomes.

Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change. Changes in tax laws or statutory tax rates, competing tax regimes, variability in the mix of pretax earnings we generate in the U.S, as compared to other countries, or new taxes in the United States or foreign jurisdictions could result in additional tax liabilities, or increased volatility in our effective tax rate and total tax expense.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

ISSUER PURCHASES OF EQUITY SECURITIES

(shares in thousands)


Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans		Maximum number of shares that may yet be purchased under the plans
July 1-31, 2025		-	$	-		-		5,719
August 1-31, 2025		1,051		118.77		1,051		4,714
September 1-30, 2025		723		120.94		723		4,019
Total		1,774	$	119.65		1,774		4,019

In November 2001, Expeditors' Board of Directors authorized a Discretionary Stock Repurchase Plan for the purpose of repurchasing our common stock in the open market to reduce the issued and outstanding stock down to 200 million outstanding shares. Subsequently, the Board of Directors has from time to time increased the amount of our common stock that may be repurchased. On February 19, 2024, the Board of Directors last authorized repurchases from 140 million shares of common stock down to 130 million outstanding shares of common stock. The maximum number of shares available for repurchase under this plan will increase as the total number of outstanding shares increases. This authorization has no expiration date.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a)

Disclosure in lieu of reporting on a Current Report on Form 8-K

Chief Financial Officer & Senior Vice President Employment Agreement

As previously disclosed in a Current Report on the Form 8-K filed with the Securities and Exchange Commission on August 7, 2025, we appointed David Hackett as Senior Vice President and Chief Financial Officer of the Company, effective October 1, 2025.

In connection with this appointment, we entered into an employment agreement with Mr. Hackett (the Employment Agreement) on August 22, 2025, with an effective date of October 1, 2025. Under the terms of the Employment Agreement, Mr. Hackett will receive an annual base salary of $100,000, subject to periodic review and adjustment by the Company’s Board of Directors or its Compensation Committee. Mr. Hackett is also eligible to receive incentive-based compensation as established by the Company’s Board of Directors or its Compensation Committee.

The Employment Agreement also provides for severance benefits in the event of a termination without cause, subject to a release of claims or resignation. The Employment Agreement contains a mandatory six-month non-compete and 12-month non-solicitation provision.

The above summary of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of that Employment Agreement. The Employment Agreement is filed as Exhibit 10.25 to this Quarterly Report on Form 10-Q.

(b)

Not applicable.

(c)

During the quarterly period ended September 30, 2025, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-K.


Exhibit Number		Description
10.25		Form of Employment Agreement executed by David Hackett, Expeditors' Senior Vice President and Chief Financial Officer dated August 22, 2025 and effective as of October 1, 2025

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, has been formatted in Inline XBRL.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

November 6, 2025		/s/ DANIEL R. WALL
		Daniel R. Wall, President, Chief Executive Officer and Director

November 6, 2025		/s/ DAVID A. HACKETT
		David A. Hackett, Senior Vice President and Chief Financial Officer