Core Insights - GXO Logistics, Inc. has announced that Carmen Gil and Joanne Mawditt have received the 2025 Women in Supply Chain award, recognizing their contributions to the logistics industry [1][2] Company Achievements - Carmen Gil, director of GXO Iberia's ecommerce business unit, is honored as a Trailblazer for her role in enhancing female leadership in logistics and for leading the development of the Marchamalo Campus, the largest logistics operation in Spain [2] - Joanne Mawditt, senior manager of operational training for the UK and Europe, is recognized as a Workforce Innovator for her initiatives in workforce development, including the creation of GXO's Driver Academy, which has improved driver training and retention [3] Company Overview - GXO Logistics is the world's largest pure-play contract logistics provider, with over 150,000 team members across more than 1,000 facilities, totaling over 200 million square feet [4] - The company focuses on addressing complex logistics challenges for leading blue-chip companies through advanced supply chain and ecommerce solutions [4]

Core Insights - GXO Logistics and B&Q are collaborating to achieve net-zero carbon emissions in B&Q's logistics operations by 2040, with significant advancements in alternative fuel usage and AI technology [1][2][3] Group 1: Partnership and Goals - The partnership between GXO and B&Q began in 2015, managing B&Q's retail transport network and focusing on sustainability and innovation in logistics [2] - B&Q aims to decarbonize its logistics fleet, with a comprehensive roadmap called the B&Q Sustainability Glidepath launched in 2022, targeting a 40% reduction in emissions by 2024 [3] Group 2: Fleet Transformation - B&Q has deployed 105 Liquified Natural Gas (LNG) vehicles since 2019, now holding the second-largest LNG fleet in the UK, which has reduced carbon emissions by 16,000 tonnes [4] - All remaining vehicles and 80 refrigerated trailers were converted to Hydrotreated Vegetable Oil (HVO) by December 2024, achieving up to 90% reduction in CO₂ emissions compared to diesel [4] Group 3: Electrification and Operational Efficiency - The current electric vehicle (EV) fleet includes five electric vans and two electric HGVs, with plans to add 55 more EVs over the next five years, projected to save 250 tonnes of CO₂ equivalent annually [5] - Initiatives to reduce road miles include backhaul optimization, saving 104 tonnes of Scope 3 emissions in 2024, and a 9.5% reduction in fleet size since 2021 through improved scheduling [5] Group 4: AI and Future Innovations - B&Q is piloting GXO's AI-powered transport optimization platform, which is expected to save 240,000 kilometers and 150 tonnes of CO₂ annually, with full implementation planned for 2025 [7] - In Q1 2025, 35 new LNG-powered Volvo FH Aero tractor units were introduced, improving fuel efficiency by 3% and saving an estimated 100 tonnes of CO₂ annually [6]

Core Viewpoint - The Zacks Transportation—Air Freight and Cargo industry is facing significant challenges due to ongoing supply-chain disruptions, high inflation, and weaker demand, leading to reduced package volumes [1][4]. Industry Overview - The industry comprises companies providing air delivery and freight services, with many offering specialized transportation and logistics solutions. The health of these companies is closely tied to the overall economy, with major players like FedEx transporting millions of packages daily [3]. Key Trends - **Economic Uncertainty & Tariff Concerns**: The industry is affected by market volatility and tariff uncertainties, particularly with China, which may lead to higher costs and dampen consumer spending [4]. - **Demand Slowdown**: A decline in shipping demand, especially in Asia and Europe, is negatively impacting key players like UPS and FedEx, leading to withheld earnings and revenue forecasts [5]. - **Strong Financial Returns for Shareholders**: Companies are increasing dividends and buybacks to reward shareholders, indicating financial strength. UPS raised its quarterly dividend to $1.64 per share, while FedEx increased its dividend by 5.1% to $1.45 [6]. Industry Performance - The Zacks Air Freight and Cargo industry ranks 202, placing it in the bottom 18% of 245 Zacks industries, indicating poor near-term prospects [7][8]. - The industry has underperformed the S&P 500, decreasing by 26.5% over the past year compared to the S&P 500's increase of 17.7% [9]. Current Valuation - The industry is currently trading at an enterprise value-to-EBITDA (EV/EBITDA) ratio of 7.97X, significantly lower than the S&P 500's 17.45X and the sector's 9.37X [12]. Stocks to Watch - **FedEx (FDX)**: The company is focused on rewarding shareholders through dividends and buybacks, with a solid liquidity position and cost-cutting efforts driving its bottom line. FDX has surpassed earnings estimates in two of the last four quarters [16][17]. - **GXO Logistics (GXO)**: The company is enhancing its logistics capabilities, benefiting from increased e-commerce and automation. GXO has consistently surpassed earnings estimates, with shares rising 9.7% over the past year [19].

Group 1 - The article discusses the investment outlook for GXO, highlighting a strong growth trajectory due to new business wins and improving fundamentals [1] - The author emphasizes a fundamentals-based approach to value investing, focusing on companies with long-term durability and robust balance sheets [1] - There is a critique of the misconception that low multiple stocks are inherently cheap, advocating for a focus on long-term growth rather than immediate price concerns [1] Group 2 - The article does not contain any disclosures related to stock positions or business relationships with the companies mentioned [2] - It clarifies that past performance does not guarantee future results and that no specific investment advice is provided [3]

[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section presents the company's unaudited interim financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents the unaudited condensed consolidated financial statements, including statements of operations, comprehensive income (loss), balance sheets, cash flows, and changes in equity, along with detailed notes explaining the basis of presentation, significant accounting policies, revenue recognition, segment information, leases, acquisitions, goodwill, debt, fair value measurements, earnings per share, stockholders' equity, employee benefit plans, restructuring costs, income taxes, and commitments and contingencies [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement presents the company's revenues, operating income, and net income (loss) for the interim periods | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $3,299 | $2,846 | $6,276 | $5,302 | | Operating income | $89 | $75 | $33 | $36 | | Net income (loss) attributable to GXO | $26 | $38 | $(70) | $1 | | Basic EPS | $0.23 | $0.32 | $(0.60) | $0.01 | | Diluted EPS | $0.23 | $0.32 | $(0.60) | $0.01 | - For the three months ended June 30, 2025, revenue increased by **$453 million (16%)** year-over-year, while net income attributable to GXO decreased by **$12 million (31.6%)**[12](index=12&type=chunk) - For the six months ended June 30, 2025, the company reported a **net loss of $70 million** attributable to GXO, a significant decline from a net income of $1 million in the prior year period[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement details net income (loss) and other comprehensive income (loss) components, including foreign currency adjustments | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $28 | $39 | $(67) | $3 | | Foreign currency translation adjustments | $136 | $(14) | $210 | $(28) | | Other comprehensive income (loss), net of tax | $128 | $(14) | $197 | $(25) | | Comprehensive income (loss) attributable to GXO | $151 | $24 | $123 | $(23) | - Comprehensive income attributable to GXO significantly increased to **$151 million** for the three months ended June 30, 2025, from $24 million in the prior year, primarily driven by positive foreign currency translation adjustments[14](index=14&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates | Metric (Millions) | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Total assets | $11,926 | $11,266 | | Total liabilities | $8,951 | $8,231 | | Total equity | $2,975 | $3,035 | | Cash and cash equivalents | $205 | $413 | | Accounts receivable, net | $1,950 | $1,799 | | Goodwill | $3,827 | $3,549 | - Total assets increased by **$660 million** to **$11,926 million** as of June 30, 2025, compared to December 31, 2024, primarily due to increases in long-term assets like operating lease assets and goodwill[17](index=17&type=chunk) - Cash and cash equivalents decreased by **$208 million**[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities | Metric (Millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $32 | $165 | | Net cash used in investing activities | $(123) | $(1,014) | | Net cash provided by (used in) financing activities | $(227) | $857 | | Net increase (decrease) in cash, restricted cash and cash equivalents | $(278) | $1 | - Net cash provided by operating activities decreased significantly to **$32 million** for the six months ended June 30, 2025, from $165 million in the prior year[19](index=19&type=chunk) - Investing activities used less cash (**$123 million** vs. $1,014 million) due to the absence of a large acquisition like Wincanton in 2025[19](index=19&type=chunk) - Financing activities shifted from providing **$857 million** in 2024 to using **$227 million** in 2025, largely due to common stock repurchases[19](index=19&type=chunk) [Condensed Consolidated Statements of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) This statement outlines the changes in various components of stockholders' equity over the reporting period | Metric (Millions) | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :---------------- | :------------------------- | :-------------------------- | | Total Equity | $3,035 | $2,975 | | Net income (loss) | $(70) | $(70) | | Common stock repurchased | $(202) | $(202) | | Other comprehensive income | $197 | $197 | - Total equity decreased from **$3,035 million** at December 31, 2024, to **$2,975 million** at June 30, 2025[21](index=21&type=chunk)[23](index=23&type=chunk) - This was primarily influenced by a **net loss of $70 million** and **$202 million** in common stock repurchases, partially offset by **$197 million** in other comprehensive income[21](index=21&type=chunk)[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements [1. Basis of Presentation and Significant Accounting Policies](index=10&type=section&id=1.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note describes the basis of financial statement preparation and outlines the company's significant accounting policies - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with GAAP for interim financial information and SEC rules, including all necessary recurring accruals[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - The Company operates as one reportable segment[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - The FASB issued ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), which the Company is currently evaluating for impact on its financial statements[30](index=30&type=chunk)[31](index=31&type=chunk) [2. Revenue Recognition](index=11&type=section&id=2.%20Revenue%20Recognition) This note explains the company's revenue recognition policies and provides disaggregated revenue information Revenue Disaggregated by Geographical Area (Millions) | Geographical Area | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United Kingdom | $1,590 | $1,289 | $2,981 | $2,202 | | United States | $767 | $731 | $1,519 | $1,478 | | Netherlands | $253 | $220 | $485 | $438 | | France | $216 | $201 | $402 | $401 | | Spain | $166 | $145 | $309 | $274 | | Italy | $105 | $97 | $200 | $190 | | Other | $202 | $163 | $380 | $319 | | Total | $3,299 | $2,846 | $6,276 | $5,302 | Revenue Disaggregated by Industry (Millions) | Industry Vertical | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Omnichannel retail | $1,626 | $1,316 | $3,048 | $2,338 | | Technology and consumer electronics | $402 | $363 | $795 | $745 | | Industrial and manufacturing | $403 | $331 | $765 | $597 | | Food and beverage | $359 | $326 | $673 | $642 | | Consumer packaged goods | $290 | $290 | $574 | $585 | | Other | $219 | $220 | $421 | $395 | | Total | $3,299 | $2,846 | $6,276 | $5,302 | - Contract assets increased to **$260 million** as of June 30, 2025, from $233 million at December 31, 2024, while contract liabilities slightly decreased to $397 million from $400 million[33](index=33&type=chunk) [3. Segment Information](index=12&type=section&id=3.%20Segment%20Information) This note presents financial information for the company's operating segments, including revenue and Adjusted EBITDA - The Company is organized into three operating segments: Americas and Asia-Pacific, United Kingdom and Ireland, and Continental Europe[35](index=35&type=chunk)[36](index=36&type=chunk) - Performance is evaluated based on Adjusted EBITDA[35](index=35&type=chunk)[36](index=36&type=chunk) Segment Adjusted EBITDA (Millions) | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $3,299 | $2,846 | $6,276 | $5,302 | | Segment Adjusted EBITDA | $227 | $205 | $405 | $372 | [4. Leases](index=13&type=section&id=4.%20Leases) This note provides details on the company's operating and finance lease assets, liabilities, and associated costs Lease Liabilities (Millions) | Lease Type | June 30, 2025 | December 31, 2024 | | :--------- | :------------ | :---------------- | | Operating lease assets | $2,646 | $2,329 | | Total operating lease liabilities | $2,871 | $2,545 | | Property and equipment, net (Finance leases) | $348 | $239 | | Total finance lease liabilities | $369 | $276 | Lease Expense (Millions) | Lease Expense (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total operating lease cost | $329 | $290 | $626 | $563 | | Total finance lease cost | $12 | $8 | $23 | $16 | | Total operating and finance lease cost | $341 | $298 | $649 | $579 | [5. Acquisition](index=15&type=section&id=5.%20Acquisition) This note details the acquisition of Wincanton plc, including purchase price allocation and related transaction costs - On April 29, 2024, GXO completed the acquisition of Wincanton plc for **£762 million ($958 million)**[43](index=43&type=chunk) - The acquisition was approved by the CMA on June 19, 2025, subject to divestment of certain grocery contracts[43](index=43&type=chunk) - Transaction costs related to the Wincanton Acquisition were **$14 million** and **$35 million** for the three and six months ended June 30, 2025, respectively[44](index=44&type=chunk) Wincanton Acquisition - Assets Acquired and Liabilities Assumed (Millions) | Category | Amount (Millions) | | :---------------- | :---------------- | | Total assets | $1,382 | | Total liabilities | $1,146 | | Net assets purchased | $236 | | Purchase price | $958 | | Goodwill recorded | $722 | [6. Goodwill](index=16&type=section&id=6.%20Goodwill) This note outlines the changes in the company's goodwill balance, primarily due to foreign exchange translation Changes in Goodwill (Millions) | Item | Amount (Millions) | | :--------------------------------- | :---------------- | | Balance as of December 31, 2024 | $3,549 | | Acquisition (Wincanton PPA reduction) | $(4) | | Impact of foreign exchange translation | $282 | | Balance as of June 30, 2025 | $3,827 | - Goodwill increased to **$3,827 million** as of June 30, 2025, from $3,549 million at December 31, 2024, primarily due to foreign exchange translation impact of **$282 million**[47](index=47&type=chunk) [7. Debt and Financing Arrangements](index=16&type=section&id=7.%20Debt%20and%20Financing%20Arrangements) This note provides a summary of the company's debt, financing arrangements, and covenant compliance Summary of Debt (Millions) | Debt Type | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Unsecured notes due 2026 | $400 | $399 | | Unsecured notes due 2029 | $594 | $593 | | Unsecured notes due 2031 | $397 | $397 | | Unsecured notes due 2034 | $491 | $490 | | Three-Year Term Loan due 2025 | $0 | $50 | | Five-Year Term Loan due 2027 | $399 | $399 | | Finance leases and other debt | $405 | $303 | | Total Debt | $2,686 | $2,631 | | Total Long-term debt | $2,596 | $2,521 | - The Company repaid the remaining **$50 million** of the Three-Year Term Loan due 2025 on May 16, 2025[50](index=50&type=chunk)[52](index=52&type=chunk) - Total debt increased to **$2,686 million** as of June 30, 2025, from $2,631 million at December 31, 2024[50](index=50&type=chunk)[52](index=52&type=chunk) - The Company has an **$800 million** revolving credit facility with no amounts outstanding as of June 30, 2025[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - It also assumed a **£175 million ($240 million)** Wincanton Revolving Credit Agreement with **£26 million ($36 million)** outstanding[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - The Company complied with all debt covenants as of June 30, 2025[56](index=56&type=chunk)[57](index=57&type=chunk) - Bank overdrafts increased to **$64 million** from zero at December 31, 2024[56](index=56&type=chunk)[57](index=57&type=chunk) Trade Receivables Sold (Millions) | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Receivables sold in period | $792 | $364 | $1,394 | $655 | | Cash consideration | $787 | $360 | $1,385 | $649 | [8. Fair Value Measurements and Financial Instruments](index=17&type=section&id=8.%20Fair%20Value%20Measurements%20and%20Financial%20Instruments) This note details the fair value measurements of debt and derivative financial instruments used for risk management - The Company uses derivative instruments to manage exposure to interest rate and foreign currency risks[63](index=63&type=chunk)[66](index=66&type=chunk) - Derivatives are classified as Level 2 within the fair value hierarchy[63](index=63&type=chunk)[66](index=66&type=chunk) Fair Value of Debt (Millions) | Debt Type | June 30, 2025 Fair Value | June 30, 2025 Carrying Value | Dec 31, 2024 Fair Value | Dec 31, 2024 Carrying Value | | :------------------------ | :----------------------- | :--------------------------- | :---------------------- | :-------------------------- | | Unsecured notes due 2026 | $387 | $400 | $380 | $399 | | Unsecured notes due 2029 | $627 | $594 | $617 | $593 | | Unsecured notes due 2031 | $348 | $397 | $336 | $397 | | Unsecured notes due 2034 | $522 | $491 | $514 | $490 | | Three-Year Term Loan due 2025 | $0 | $0 | $49 | $50 | | Five-Year Term Loan due 2027 | $392 | $399 | $394 | $399 | Notional Amount and Fair Value of Derivative Instruments (Millions) | Derivative Type | June 30, 2025 Notional | June 30, 2025 Fair Value | Dec 31, 2024 Notional | Dec 31, 2024 Fair Value | | :------------------------ | :--------------------- | :----------------------- | :-------------------- | :---------------------- | | Cross-currency swap agreements (net investment hedges) | $2,024 | $219 | $1,865 | $67 | | Interest rate swaps (cash flow hedges) | $125 | $2 | $125 | $3 | | Foreign currency option contracts (not designated) | $263 | $0 | $300 | $13 | | Foreign currency forward contracts (not designated) | $271 | $2 | $125 | $1 | [9. Earnings per Share](index=20&type=section&id=9.%20Earnings%20per%20Share) This note provides the calculation of basic and diluted earnings (loss) per share for the reporting periods Earnings (Loss) Per Share (EPS) | Metric (Shares in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common shares | $26 | $38 | $(70) | $1 | | Basic weighted-average common shares | 114,812 | 119,427 | 116,890 | 119,350 | | Diluted weighted-average common shares | 115,055 | 119,683 | 116,890 | 119,680 | | Basic earnings (loss) per share | $0.23 | $0.32 | $(0.60) | $0.01 | | Diluted earnings (loss) per share | $0.23 | $0.32 | $(0.60) | $0.01 | - Basic and diluted EPS for the three months ended June 30, 2025, were **$0.23**, down from $0.32 in the prior year[71](index=71&type=chunk) - For the six months ended June 30, 2025, both basic and diluted EPS were **$(0.60)**, a significant decrease from $0.01 in the prior year[71](index=71&type=chunk) [10. Stockholders' Equity](index=20&type=section&id=10.%20Stockholders%27%20Equity) This note outlines changes in stockholders' equity, including share repurchases and other comprehensive income (loss) - On February 18, 2025, the board authorized a **$500 million** share repurchase plan[72](index=72&type=chunk)[73](index=73&type=chunk)[121](index=121&type=chunk) - As of June 30, 2025, the Company repurchased approximately **5.4 million shares** for **$202 million**, with **$300 million** remaining authorization[72](index=72&type=chunk)[73](index=73&type=chunk)[121](index=121&type=chunk) Changes in Accumulated Other Comprehensive Income (Loss) (AOCIL) (Millions) | AOCIL Component | As of Dec 31, 2024 | As of June 30, 2025 | | :------------------------ | :----------------- | :------------------ | | Foreign Currency Translation Adjustments | $(195) | $223 | | Net Investment Hedges | $31 | $(177) | | Cash Flow Hedges | $4 | $3 | | Defined Benefit Plans | $(155) | $(167) | | Less: AOCIL attributable to NCI | $2 | $(2) | | AOCIL attributable to GXO | $(313) | $(120) | [11. Employee Benefit Plans](index=22&type=section&id=11.%20Employee%20Benefit%20Plans) This note describes the company's defined benefit pension plans and defined contribution costs - The Company sponsors defined benefit pension plans, primarily in the U.K., which are closed to new participants and accruals[77](index=77&type=chunk)[79](index=79&type=chunk) - Net periodic pension income for the six months ended June 30, 2025, was **$9 million**[77](index=77&type=chunk)[79](index=79&type=chunk) Defined Contribution Costs (Millions) | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Defined contribution costs | $23 | $21 | $54 | $38 | [12. Restructuring Costs and Other](index=24&type=section&id=12.%20Restructuring%20Costs%20and%20Other) This note details the nature and changes in the company's restructuring costs and related liabilities - Restructuring costs primarily relate to severance for administrative function optimization[82](index=82&type=chunk) - The restructuring liability increased to **$16 million** as of June 30, 2025, from $10 million at December 31, 2024[82](index=82&type=chunk) [13. Income Taxes](index=24&type=section&id=13.%20Income%20Taxes) This note provides information on income tax expense, effective tax rates, and the impact of new tax rules - Income tax expense for the three months ended June 30, 2025, was **$15 million** (effective tax rate of **34.6%**), up from $14 million (25.4%) in the prior year, driven by a decrease in pre-tax income[83](index=83&type=chunk) - For the six months ended June 30, 2025, income tax expense was **$17 million** on a pre-tax loss of **$(50) million**, compared to $4 million on pre-tax income of $7 million in the prior year[84](index=84&type=chunk) - The effective tax rate change was due to decreased pre-tax income, offset by non-deductible regulatory and transaction costs[84](index=84&type=chunk) - The Company has incorporated the estimated annual effect of Pillar Two Global Anti-Base Erosion rules into its income tax provision for the three and six months ended June 30, 2025, expecting additional income tax related to Pillar Two during fiscal 2025[86](index=86&type=chunk) [14. Commitments and Contingencies](index=24&type=section&id=14.%20Commitments%20and%20Contingencies) This note describes the company's legal proceedings, commitments, and related accruals for potential losses - The Company is involved in various legal proceedings and establishes accruals for probable and reasonably estimable losses[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) - Management believes current accruals are adequate and does not expect a material adverse effect on financial results from current matters[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) - In Q1 2025, the Company accrued **€61 million ($66 million)** for a VAT deductibility investigation by Italian authorities[92](index=92&type=chunk) - In Q2 2025, final payments of **€59 million ($68 million)** were made, and **$65 million** in expenses were recorded for the six months ended June 30, 2025[92](index=92&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=26&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the Company's financial performance and condition, discussing results of operations for the three and six months ended June 30, 2025, compared to the prior year. It highlights the impact of the Wincanton acquisition, changes in revenue, expenses, and profitability, as well as liquidity, capital resources, and significant accounting policies [Business Overview](index=26&type=section&id=Business%20Overview) This section provides an overview of GXO Logistics' business model, services, and strategic acquisitions - GXO Logistics, Inc. is the world's largest pure-play contract logistics provider, offering high-value-added warehousing, distribution, e-commerce, and reverse logistics services, differentiated by technology-enabled customized solutions[96](index=96&type=chunk) - The Company's business model is asset-light, resilient, with high returns, strong free cash flow, and long-term customer contracts, often with fixed and variable components[97](index=97&type=chunk) - The acquisition of Wincanton plc on April 29, 2024, significantly impacts year-over-year comparisons in results of operations[98](index=98&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for the three and six months ended June 30, 2025 [Three Months Ended June 30, 2025 compared with the Three Months Ended June 30, 2024](index=27&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20compared%20with%20the%20Three%20Months%20Ended%20June%2030%2C%202024) This section compares the company's financial results for the three months ended June 30, 2025, against the prior year Key Financials - Three Months Ended June 30 (Millions) | Metric (Millions) | 2025 | 2024 | $ Change | % Change | | :---------------- | :---- | :---- | :------- | :------- | | Revenue | $3,299 | $2,846 | $453 | 16 % | | Direct operating expense | $2,813 | $2,389 | $424 | 18 % | | Operating income | $89 | $75 | $14 | 19 % | | Net income | $28 | $39 | $(11) | (28)% | - Revenue increased by **16% ($453 million)**, with **$168 million** from the Wincanton Acquisition and **$127 million** from favorable foreign currency movements[100](index=100&type=chunk)[101](index=101&type=chunk) - Direct operating expense increased by **18% ($424 million)**, primarily due to the Wincanton Acquisition and business growth, rising to **85.3% of revenue** from 83.9%[100](index=100&type=chunk)[101](index=101&type=chunk) - Operating income increased by **19%** to **$89 million**, but net income decreased by **28%** to **$28 million**[99](index=99&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - This decrease was primarily due to higher other expense, net (driven by increased unrealized foreign currency loss), and higher interest expense, net (due to Wincanton acquisition debt)[99](index=99&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) [Six Months Ended June 30, 2025 compared with the Six Months Ended June 30, 2024](index=29&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20compared%20with%20the%20Six%20Months%20Ended%20June%2030%2C%202024) This section compares the company's financial results for the six months ended June 30, 2025, against the prior year Key Financials - Six Months Ended June 30 (Millions) | Metric (Millions) | 2025 | 2024 | $ Change | % Change | | :---------------- | :---- | :---- | :------- | :------- | | Revenue | $6,276 | $5,302 | $974 | 18 % | | Direct operating expense | $5,371 | $4,445 | $926 | 21 % | | Operating income | $33 | $36 | $(3) | (8)% | | Net income (loss) | $(67) | $3 | $(70) | n/m | - Revenue increased by **18% ($974 million)**, with **$655 million** from the Wincanton Acquisition and **$94 million** from favorable foreign currency movements[109](index=109&type=chunk)[110](index=110&type=chunk) - Direct operating expense increased by **21% ($926 million)**, reaching **85.6% of revenue**, up from 83.8%[109](index=109&type=chunk)[110](index=110&type=chunk) - Operating income decreased by **8%** to **$33 million**[108](index=108&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - The Company reported a **net loss of $67 million**, a significant decline from a net income of $3 million in the prior year[108](index=108&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - This was primarily due to lower operating income, higher other expense (increased unrealized foreign currency loss), and higher interest expense (Wincanton acquisition debt)[108](index=108&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - Regulatory matter and litigation expense for the six months ended June 30, 2025, was **$65 million**, primarily due to a VAT deductibility matter with Italian authorities[114](index=114&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, borrowing capacity, and ability to meet financial obligations - As of June 30, 2025, the Company held **$205 million** in cash and cash equivalents, **$2 million** in restricted cash, and had **$1,003 million** in borrowing capacity under its revolving credit facilities[120](index=120&type=chunk) - The Company's board authorized a **$500 million** share repurchase plan on February 18, 2025, with **$300 million** remaining authorization as of June 30, 2025[121](index=121&type=chunk) - Repurchases are funded by existing cash, revolving credit facilities, and/or other financing sources[121](index=121&type=chunk) - Management believes current liquidity sources (cash, operations, revolving credit, factoring) are sufficient to fund operations and obligations for at least the next 12 months[122](index=122&type=chunk) [Financial Condition](index=31&type=section&id=Financial%20Condition) This section analyzes changes in the company's current and long-term assets and liabilities Asset and Liability Balances (Millions) | Category (Millions) | June 30, 2025 | December 31, 2024 | $ Change | % Change | | :------------------ | :------------ | :---------------- | :------- | :------- | | Current assets | $2,589 | $2,641 | $(52) | (2)% | | Long-term assets | $9,337 | $8,625 | $712 | 8 % | | Current liabilities | $3,410 | $3,189 | $221 | 7 % | | Long-term liabilities | $5,541 | $5,042 | $499 | 10 % | - Current assets decreased due to cash used for stock repurchases and debt repayment, partially offset by increased accounts receivable[124](index=124&type=chunk) - Long-term assets increased primarily due to operating lease assets and foreign currency translation[124](index=124&type=chunk) - Liabilities increased due to bank overdrafts, derivatives' fair value, and lease liabilities[124](index=124&type=chunk) [Cash Flow Activity](index=32&type=section&id=Cash%20Flow%20Activity) This section summarizes the significant changes in cash flows from operating, investing, and financing activities Cash Flow Summary (Millions) | Activity (Millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :------------------ | :----------------------------- | :----------------------------- | :------- | :------- | | Net cash provided by operating activities | $32 | $165 | $(133) | (81)% | | Net cash used in investing activities | $(123) | $(1,014) | $891 | (88)% | | Net cash provided by (used in) financing activities | $(227) | $857 | $(1,084) | n/m | - Operating cash flows decreased by **$133 million** due to lower income and increased working capital consumption[126](index=126&type=chunk) - Investing cash flows used less cash (**$123 million** vs. $1.0 billion) due to the absence of a major acquisition in 2025[127](index=127&type=chunk) - Financing activities shifted from providing cash to using cash, primarily due to **$200 million** in common stock repurchases[128](index=128&type=chunk) [Off-Balance Sheet Arrangements](index=32&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of material off-balance sheet financial arrangements impacting the company - The Company does not engage in any off-balance sheet financial arrangements that have a material current or future effect on its financial condition, results of operations, or liquidity[129](index=129&type=chunk) [Contractual Obligations](index=33&type=section&id=Contractual%20Obligations) This section addresses the company's contractual obligations and any material changes from the prior year - As of June 30, 2025, the Company's contractual obligations had not materially changed compared with December 31, 2024[130](index=130&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no material changes to the company's critical accounting policies and estimates - There have been no material changes to the critical accounting policies and estimates previously disclosed in the 2024 Form 10-K[131](index=131&type=chunk) [Accounting Pronouncements](index=33&type=section&id=Accounting%20Pronouncements) This section refers to disclosures regarding new accounting standards and their potential impact - Information related to new accounting standards is included in Note 1. 'Basis of Presentation and Significant Accounting Policies' in Part I, Item 1 of this Quarterly Report on Form 10-Q[132](index=132&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=33&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section addresses the Company's exposure to market risks, primarily from variable-rate debt and foreign currency fluctuations. It notes that derivative instruments are used to manage these risks and that there have been no material changes to market risk exposure for the six months ended June 30, 2025, compared to the prior year's Form 10-K - The Company is exposed to market risk from variable-rate debt and foreign currency fluctuations, which it manages using derivative instruments[133](index=133&type=chunk) - There have been no material changes to the Company's market risk exposure for the six months ended June 30, 2025, compared to the disclosures in the 2024 Form 10-K[133](index=133&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=33&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details the evaluation of the Company's disclosure controls and procedures, concluding their effectiveness as of June 30, 2025. It also addresses changes in internal control over financial reporting, noting only those related to the Wincanton acquisition - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[134](index=134&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025, other than those related to the acquisition of Wincanton plc[135](index=135&type=chunk) [PART II—OTHER INFORMATION](index=34&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section includes information on legal proceedings, risk factors, equity security sales, and required exhibits [ITEM 1. LEGAL PROCEEDINGS](index=34&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 14, 'Commitments and Contingencies,' in Part I, Item 1 for a description of the Company's legal proceedings - Details regarding legal proceedings are provided in Note 14. 'Commitments and Contingencies' in Part I, Item 1[136](index=136&type=chunk) [ITEM 1A. RISK FACTORS](index=34&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates the risk factors previously disclosed in the 2024 Form 10-K, specifically highlighting potential impacts from changes in tax laws and regulations, such as the OECD's Pillar Two rules and the recently signed One Big Beautiful Bill Act - No material changes to risk factors were identified, except for those related to changes in tax laws and regulations for U.S. and multinational companies[137](index=137&type=chunk) - New tax legislation, including the OECD's Pillar Two Global Anti-Base Erosion rules and the One Big Beautiful Bill Act (P.L. 119-21), may increase the Company's tax liability, with various provisions effective from 2024 through 2027[138](index=138&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=34&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the Company's share repurchase activity under the $500 million Repurchase Plan authorized on February 18, 2025, including the number of shares purchased and the remaining authorization - The Company's board authorized a **$500 million** share repurchase plan on February 18, 2025[139](index=139&type=chunk) Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :---------------- | :------------------------------- | :--------------------------- | | April 1 - April 30 | 2,590,755 | $34.86 | | May 1 - May 31 | — | — | | June 1 - June 30 | — | — | | Total | 2,590,755 | $34.86 | - As of June 30, 2025, the approximate dollar value of shares that may yet be purchased under the Repurchase Plan was **$300,000,016**[140](index=140&type=chunk)[142](index=142&type=chunk) [ITEM 6. EXHIBITS](index=35&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including offer letters, certifications from executive officers, and Inline XBRL documents - Exhibits include an offer letter, certifications from the Principal Executive Officer and Principal Financial Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents[143](index=143&type=chunk) [SIGNATURES](index=36&type=section&id=Signatures) This section contains the required signatures of the company's principal executive and financial officers - The report was signed on August 6, 2025, by Malcolm Wilson (Chief Executive Officer) and Baris Oran (Chief Financial Officer)[147](index=147&type=chunk)

Financial Data and Key Metrics Changes - The company reported record revenue of $3.3 billion, growing 16% year over year, with 6% being organic growth, marking the highest organic growth in nine quarters [16][21] - Adjusted EBITDA was $212 million, with margins expanding by 90 basis points sequentially due to improved site-level efficiencies and better space utilization [18][21] - The company raised its full-year adjusted EBITDA guidance to a range of $865 million to $885 million, an increase of $25 million from the initial range [7][21] Business Line Data and Key Metrics Changes - New business wins totaled $307 million, up 13% year over year, contributing to over $500 million in new business for the first half of the year [6][7] - The strongest organic growth was observed in the omnichannel retail and technology verticals, with a retention rate in the mid-90s [16][17] Market Data and Key Metrics Changes - The sales pipeline remains robust at $2.4 billion, exclusive of the Wincanton sales pipeline, and has grown by more than 13% since the last full year prior to the spin [12] - The company is seeing strong demand in the healthcare market, with a landmark deal with England's National Health Services supply chain [25][26] Company Strategy and Development Direction - The company is focused on accelerating organic growth and integrating Wincanton, expecting significant revenue synergies from this acquisition [20][21] - The strategy emphasizes leveraging AI and automation to enhance operational efficiency and customer satisfaction, with a strong focus on high-growth verticals [24][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering the full-year organic growth outlook, citing strong customer preparations for the holiday season and a robust level of new business signed for 2026 [40][41] - The operating environment is described as stable, with no significant disruptions currently affecting operations, allowing for more long-term decision-making by customers [100][102] Other Important Information - The company has received an upgrade from Moody's, achieving investment-grade ratings from all three major agencies for the first time since the spin [19][20] - The CFO announced plans to step down, with a successor to be named, highlighting the company's strong performance and future potential [13][15] Q&A Session Summary Question: Can you highlight what has changed from a geographic and market perspective regarding organic growth acceleration? - Management noted improvements in North America and the UK, with strong performance in aerospace and technology sectors, and normal inventory levels preparing for the holiday season [36][39] Question: Do you think organic revenue growth could reaccelerate into upper single-digit ranges? - Management indicated that the integration of Wincanton and strong new business momentum could support higher growth rates, while remaining cautious about macroeconomic conditions [50][51] Question: What is driving the increased rate of change in guidance? - The CFO attributed the improvements to internal efficiencies, better space utilization, and contributions from new business wins, with expectations for continued sequential improvement [66][68] Question: Can you share details on the aerospace and defense business? - Management highlighted a strong presence in the US market with significant growth potential in Europe, supported by a robust pipeline related to industrial and aerospace sectors [70][71] Question: What are the expectations for CapEx in the second half of the year? - The CFO mentioned a decrease in CapEx due to some customers opting to handle their own capital expenditures, but assured that this would not impact future growth [108][110] Question: What advice would you give to the new CEO? - The outgoing CEO expressed confidence in the new CEO's capabilities and emphasized the importance of continuing the company's growth trajectory while improving margins and diversifying the customer base [112][116]

Financial Data and Key Metrics Changes - The company reported record revenue of $3.3 billion, growing 16% year over year, with 6% being organic growth, marking the highest quarter organic growth in nine quarters [16] - Adjusted EBITDA was $212 million, with margins expanding by 90 basis points sequentially due to improved productivity initiatives [17] - The company raised its full-year adjusted EBITDA guidance to a new range of $865 million to $885 million, an increase of $25 million from the initial range [6][20] Business Line Data and Key Metrics Changes - New business wins totaled $307 million, up 13% year over year, with significant contracts from major clients like Boeing and L'Oreal [5] - The company secured approximately $800 million of incremental revenue for 2025, supported by a mid-90s retention rate [16] - The sales pipeline stands at $2.4 billion, exclusive of the Wincanton sales pipeline, reflecting a more diverse and robust opportunity set [12] Market Data and Key Metrics Changes - Strongest organic growth was observed in the omnichannel retail and technology verticals, with notable performance in aerospace and defense sectors [16][25] - The healthcare market represents a $34 billion opportunity, with the company starting operations for a significant deal with England's National Health Services [25] - The industrial and aerospace businesses are among the fastest-growing verticals, with the pipeline in these areas doubling over the last eighteen months [25] Company Strategy and Development Direction - The company aims to leverage its global scale and technological expertise to capitalize on market tailwinds driving the future of fulfillment [23] - Integration of Wincanton is expected to unlock growth opportunities in industrial and aerospace markets across Europe, with anticipated revenue synergies [7][20] - The focus for 2025 will be on accelerating organic growth and integrating Wincanton, with expectations of capturing strategic growth opportunities from acquisitions [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering the full-year organic growth outlook, citing strong customer preparations for the holiday season [39] - The operating environment is described as dynamic but stable, with no significant disruptions currently affecting operations [96] - Management maintains a conservative outlook for the remainder of the year while acknowledging opportunities for better performance [42] Other Important Information - The company has repurchased 5.4 million shares, about 4% of total shares outstanding, at an average price of $37.34, reflecting a 26% discount to the average share price over the last thirty trading days [19][57] - Moody's upgraded the company's credit rating, achieving investment-grade ratings from all three major agencies for the first time since the spin [20] Q&A Session Summary Question: Can you highlight what has changed from a geographic and market perspective regarding organic growth acceleration? - Management noted improvements in North America and the UK, with strong performance in aerospace and technology sectors, and normal inventory levels preparing for the holiday season [36][39] Question: Do you think organic revenue growth could reaccelerate back into upper single-digit ranges? - Management indicated that the integration of Wincanton and strong new business momentum could support higher growth rates, while remaining cautious about macroeconomic conditions [51][56] Question: What is driving the increased rate of change in guidance? - The company cited internal efficiencies, improved space utilization, and strong momentum from new business wins as key drivers for the improved guidance [64] Question: Can you discuss the A&D space and its growth potential? - Management highlighted a strong presence in the US with blue-chip customers and significant growth potential in Europe, with a pipeline of $500 million related to industrial and aerospace [68] Question: What are the strategic priorities with the new CEO transition? - Management emphasized the importance of the new board members' industry expertise and the need for the new CEO to acclimatize to the company before making strategic adjustments [118]

Financial Performance - Revenue reached $33 billion, with organic revenue up by 6%[13] - Adjusted EBITDA was $212 million[13] - Adjusted diluted EPS stood at $057[13] - Free cash flow was $(43) million[13] Business Growth - New business wins totaled $307 million in annualized revenue during Q2 2025[11, 16] - The sales pipeline increased year-over-year to $24 billion as of Q2 2025[16] - $795 million of incremental revenue for 2025 was won through Q2 2025[16] Capital Allocation and Returns - Operating return on invested capital increased year-over-year to 46% in Q2 2025[16, 24] - The company repurchased an additional 26 million shares[11] Balance Sheet and Liquidity - Total debt amounted to $2686 million[24] - Net debt was $2545 million, with a net leverage ratio of 30x[24] - Liquidity of $1208 million was available at the end of Q2 2025[24] FY 2025 Guidance - Organic revenue growth is projected to be between 35% and 65%[25] - Adjusted EBITDA is expected to range from $865 million to $885 million[25] - Adjusted diluted EPS is forecasted to be between $243 and $263[25] - Adjusted EBITDA to free cash flow conversion is targeted at 25% to 35%[25]

Core Insights - GXO Logistics reported strong Q2 2025 earnings with GAAP revenue of $3.30 billion, a 15.9% increase year-over-year, exceeding analyst estimates by $200 million [1][5] - Adjusted earnings per share (EPS) reached $0.57, surpassing expectations, while adjusted EBITDA margin decreased to 6.4% [1][7] - The company faced operational challenges with negative free cash flow of $(43) million, a significant decline from positive $31 million a year earlier [1][8] Financial Performance - GAAP revenue for Q2 2025 was $3,299 million, up from $2,846 million in Q2 2024, reflecting a 15.9% year-over-year growth [2] - Non-GAAP EPS was $0.57, a 3.6% increase from $0.55 in Q2 2024 [2] - Adjusted EBITDA was $212 million, up 13.4% from $187 million in the previous year [2] - Free cash flow (non-GAAP) fell to $(43) million from $31 million, marking a 238.7% decline [2][8] Business Overview - GXO Logistics specializes in contract logistics, focusing on distribution, warehousing, and supply chain automation for large customers across various industries [3] - The company is investing in technology-led efficiencies, including automation and AI platforms, to enhance productivity in warehouse management [4][10] Growth Drivers - Organic revenue growth reached 5.6% for Q2 2025, the fastest rate in nine quarters, with $307 million in new annualized business signed, a 13% increase year-over-year [6] - The sales pipeline stands at $2.4 billion, also up 13% year-over-year, indicating strong future growth potential [6] - The customer base is diversified, with no single client contributing more than 6% of revenue [12] Strategic Initiatives - The integration of Wincanton is a key focus, expected to deliver $58 million in annual cost synergies starting in late 2025 [4][11] - Management plans to monitor margin progression and the success of the Wincanton integration while maintaining a healthy sales pipeline [14] Future Outlook - Management raised its FY2025 adjusted EBITDA guidance to a range of $865 million to $885 million, with organic revenue growth expected between 3.5% and 6.5% [13] - The company anticipates adjusted EBITDA to free cash flow conversion to range from 25% to 35% [13] - Despite potential softening in U.S. consumer activity, the company expects to remain within its full-year guidance [14]

Group 1: Earnings Performance - GXO Logistics reported quarterly earnings of $0.57 per share, exceeding the Zacks Consensus Estimate of $0.56 per share, and up from $0.55 per share a year ago, representing an earnings surprise of +1.79% [1] - The company posted revenues of $3.3 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.61%, compared to year-ago revenues of $2.85 billion [2] - Over the last four quarters, GXO Logistics has consistently surpassed consensus EPS estimates [2] Group 2: Stock Performance and Outlook - GXO Logistics shares have increased approximately 11.4% since the beginning of the year, outperforming the S&P 500's gain of 7.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.76 on revenues of $3.32 billion, and for the current fiscal year, it is $2.51 on revenues of $12.86 billion [7] - The estimate revisions trend for GXO Logistics was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Group 3: Industry Context - The Transportation - Air Freight and Cargo industry, to which GXO Logistics belongs, is currently ranked in the bottom 8% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact GXO Logistics' stock performance [5]