Group 1 - QXO Inc. (NYSE:QXO) has been initiated with an Outperform rating and a $28 price target by Raymond James analyst Sam Darkatsh, highlighting the company's acquisition of Beacon Roofing as a significant move for building products distribution [1][2] - The company aims for long-term growth with a target of reaching $50 billion in revenue, presenting an attractive risk-reward setup despite current lackluster investor sentiment affecting share prices [2][3] - Execution is critical for QXO, with successful integration and operational delivery being key factors in gaining investor confidence [3] Group 2 - QXO Inc. operates as a distributor of roofing, waterproofing, and complementary building products in the United States [3]

Core Viewpoint - QXO, Inc. is identified as a strong investment opportunity for the next three months, with a Buy rating and a price target of $28 set by Raymond James analyst Sam Darkatsh [1][2]. Company Overview - QXO, Inc. operates in the distribution of roofing, waterproofing, and building products in the United States, utilizing technology to assist contractors and suppliers in managing inventory, orders, and customer service [3]. Investment Highlights - The acquisition of Beacon Roofing Supply for approximately $11 billion is seen as a significant milestone for QXO, providing a robust platform for building product distribution and supporting the company's revenue goal of $50 billion [2]. - The investment setup for QXO is described as asymmetrically favorable, indicating a positive outlook for potential returns [2]. Risks and Challenges - There are potential execution risks associated with the company's plans that could challenge and delay its objectives [2].

Core Viewpoint - Morgan Stanley initiates coverage on QXO Inc. with a "buy" rating and a target price of $35, highlighting the company's potential for significant growth in a highly fragmented industry [1][2] Company Overview - QXO Inc. is a distributor of roofing, waterproofing, and complementary building materials, providing technical solutions and consulting services primarily to manufacturing, distribution, and service industries [4] - The company operates under a "merger and acquisition + technology-driven" strategy, focusing on consolidating the highly fragmented building materials distribution sector [4] Market Potential - The U.S. industrial distribution sector has strong consolidation and acquisition potential, with no single player holding more than a mid-single-digit market share, presenting QXO with significant opportunities to capture market share [3] - QXO aims to increase its overall revenue to over $50 billion, supported by a management team with a proven track record of value creation [1][3] Business Model - QXO's business model relies on acquiring companies and improving their core operations through technology adoption and best practices, creating a value creation cycle that is less dependent on macroeconomic conditions [3] - The company plans to implement a repeatable strategy that has been successful in previous ventures led by Brad Jacobs, focusing on acquiring companies at lower valuation multiples and enhancing performance through scale and technology [3] Financial Outlook - QXO is expected to experience strong compound growth in EBITDA over the next decade, with attractive risk-return characteristics for investors [2] - The acquisition of Beacon Roofing Supply for approximately $11 billion solidifies QXO's leading position in the roofing and waterproofing distribution sector [5][6] Industry Dynamics - The roofing products segment, primarily driven by maintenance and replacement needs, provides a stable revenue foundation for QXO, with about 80% of Beacon's revenue coming from these sources [6] - Favorable macroeconomic factors, such as a potential recovery in the U.S. construction industry and anticipated interest rate cuts, may enhance QXO's pricing power [6]

Core Viewpoint - Morgan Stanley analyst Christopher Snyder initiates coverage on QXO Inc. with a "Buy" rating and a target price of $35, highlighting the company's potential for long-term growth and valuation expansion in a highly fragmented industry [1][2]. Company Overview - QXO Inc. is a distributor and consulting service provider for roofing, waterproofing, and complementary building materials, primarily serving manufacturing, distribution, and service industries [4]. - The company operates on a "merger and acquisition + technology-driven" strategy within the North American building materials distribution sector, focusing on B2B distribution [4]. Market Position and Strategy - QXO aims to increase its overall revenue to over $50 billion, supported by a management team led by Brad Jacobs, known for creating significant shareholder value in previous ventures [1][2]. - The company plans to leverage its proven strategies and repeatable models to acquire and integrate smaller competitors, enhancing operational efficiency and market share [3]. Financial Projections - QXO is expected to experience strong compound growth in EBITDA over the decade, with attractive risk-return characteristics for investors [2]. - The company is projected to increase the equity value of acquired firms by approximately 125% within five years post-acquisition, translating to an annualized internal rate of return (IRR) of about 25% [3]. Industry Dynamics - The U.S. industrial distribution sector has significant consolidation and acquisition potential, with no single player holding more than a median market share [3]. - QXO's focus on operational efficiency and technology investment is expected to reduce service costs for distributors and enhance customer profitability, creating a positive feedback loop [3]. Key Acquisition - QXO's acquisition of Beacon Roofing Supply for approximately $11 billion solidifies its position as a leading distributor in the roofing and waterproofing sector, with a focus on a fragmented $800 billion market [5]. - Beacon Roofing Supply contributes stable revenue, with about 80% of its income derived from repair and replacement, which supports QXO's core strategy [5][6]. Economic Factors - Favorable macroeconomic conditions, including a potential recovery in the U.S. construction industry and anticipated interest rate cuts, may enhance QXO's pricing power and market opportunities [6].

随着股权价值预计将显著扩张，且EBITDA预计在本十年内将以较高速度呈现出强劲复合增长，大摩分 析师Snyder认为QXO Inc提供了具有吸引力的风险投资回报特征。在估值方面，他认为该股相较同行们 以折价交易，尤其是该公司拥有结构性的优势，因此在其成长故事的这一最新阶段呈现出令人信服的入 场时点。 经过验证的剧本与可重复的模式 智通财经APP获悉，来自华尔街金融巨头摩根士丹利的资深分析师Christopher Snyder启动对于QXO Inc. (QXO.US)的评级与目标价覆盖，首次覆盖即给予该公司股票"买入"评级以及35美元目标价。这位分析 师强调，QXO所处行业可谓高度分散化，蕴含可观的整合空间与长期业绩增长潜力，这为该公司估值 与基本面扩张提供了非常有利的定位，并且强调QXO是估值较高的美国股市目前最值得买入的高贝塔 股票之一。截至上周五美股收盘，QXO股价收于22.05美元。 大摩分析师Snyder指出，该公司计划将整体营收规模提升至500亿美元以上，并得到管理团队的支持 ——在Brad Jacobs的领导下，该团队拥有经验证的业绩扩张记录，其此前在工业领域的创业项目为股东 们创造出显著价值。 ...

Company Overview - QXO, Inc. (NYSE: QXO) has transitioned from being a reseller of business application software to focusing on disruptive initiatives in the North American building products distribution industry, gaining favor with the investment community [1] Investment Community Sentiment - The company appears to have garnered positive attention from investors, indicating a shift in perception regarding its business model and potential for growth in the building products sector [1]

PART I. FINANCIAL INFORMATION This section provides QXO's unaudited condensed consolidated financial statements and management's analysis of its financial condition and operational results [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents QXO's unaudited condensed consolidated financial statements, detailing the financial impact of the Beacon Acquisition [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of QXO's financial position, highlighting significant changes driven by the Beacon Acquisition | Assets/Liabilities/Equity | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (in millions) | Percentage Change | | :------------------------ | :-------------------------- | :------------------------------ | :------------------- | :---------------- | | **Assets** | | | | | | Cash and cash equivalents | $2,278.5 | $5,068.5 | $(2,790.0) | -55.05% | | Accounts receivable, net | $1,575.7 | $2.7 | $1,573.0 | 58259.26% | | Inventories, net | $1,849.6 | $— | $1,849.6 | N/A | | Total current assets | $6,494.8 | $5,089.6 | $1,405.2 | 27.61% | | Property and equipment, net | $696.3 | $0.4 | $695.9 | 173975.00% | | Goodwill | $5,137.9 | $1.2 | $5,136.7 | 428058.33% | | Intangibles, net | $4,003.8 | $4.0 | $3,999.8 | 99995.00% | | Total assets | $17,114.2 | $5,098.3 | $12,015.9 | 235.68% | | **Liabilities** | | | | | | Accounts payable | $1,426.9 | $6.2 | $1,420.7 | 22914.52% | | Accrued expenses | $585.7 | $38.6 | $547.1 | 1417.36% | | Total current liabilities | $2,165.4 | $45.1 | $2,120.3 | 4701.33% | | Long-term debt, net | $3,051.5 | $— | $3,051.5 | N/A | | Total liabilities | $7,198.9 | $45.4 | $7,153.5 | 15756.61% | | **Stockholders' Equity** | | | | | | Total stockholders' equity | $9,915.3 | $5,052.9 | $4,862.4 | 96.23% | | Total liabilities and stockholders' equity | $17,114.2 | $5,098.3 | $12,015.9 | 235.68% | - Total assets increased significantly by **235.68% to $17,114.2 million** as of June 30, 2025, primarily driven by the Beacon Acquisition, which introduced substantial goodwill (**$5,137.9 million**) and intangibles (**$4,003.8 million**)[12](index=12&type=chunk)[31](index=31&type=chunk)[66](index=66&type=chunk) - Cash and cash equivalents decreased by **55.05% to $2,278.5 million**, reflecting the cash outflow for the Beacon Acquisition[12](index=12&type=chunk)[65](index=65&type=chunk) - Total liabilities surged by **15756.61% to $7,198.9 million**, largely due to new long-term debt incurred to finance the Beacon Acquisition[12](index=12&type=chunk)[120](index=120&type=chunk)[122](index=122&type=chunk)[126](index=126&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details QXO's revenues, expenses, and profitability, reflecting the operational impact of the Beacon Acquisition | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net sales | $1,906.4 | $14.5 | $1,919.8 | $29.0 | | Cost of products sold | $1,504.7 | $8.7 | $1,512.8 | $17.5 | | Gross profit | $401.7 | $5.8 | $407.0 | $11.5 | | Selling, general and administrative | $456.8 | $9.8 | $501.2 | $15.0 | | Depreciation | $27.2 | $0.1 | $27.3 | $0.2 | | Amortization | $79.8 | $0.2 | $80.0 | $0.4 | | Loss from operations | $(162.1) | $(4.3) | $(201.5) | $(4.1) | | Interest (expense) income, net | $(30.2) | $3.5 | $26.4 | $3.4 | | Loss on debt extinguishment | $(45.7) | $— | $(45.7) | $— | | Net loss | $(58.5) | $(0.6) | $(49.8) | $(0.5) | | Loss per common share - basic and diluted | $(0.15) | $(9.93) | $(0.19) | $(9.72) | - Net sales for the three months ended June 30, 2025, dramatically increased to **$1,906.4 million** from **$14.5 million** in the prior year, primarily due to the Beacon Acquisition[14](index=14&type=chunk)[155](index=155&type=chunk) - The company reported a net loss of **$(58.5) million** for the three months ended June 30, 2025, compared to **$(0.6) million** in the prior year, influenced by increased operating expenses, interest expense from new debt, and a loss on debt extinguishment[14](index=14&type=chunk)[159](index=159&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents QXO's comprehensive loss, including net loss and other comprehensive income/loss components | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net loss | $(58.5) | $(0.6) | $(49.8) | $(0.5) | | Foreign currency translation adjustment | $(3.1) | $— | $(3.1) | $— | | Total other comprehensive loss | $(3.1) | $— | $(3.1) | $— | | Comprehensive loss | $(61.6) | $(0.6) | $(52.9) | $(0.5) | - Comprehensive loss for the three months ended June 30, 2025, was **$(61.6) million**, including a foreign currency translation adjustment of **$(3.1) million**, which was not present in the prior year[17](index=17&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in QXO's equity, reflecting capital raises and net losses post-Beacon Acquisition | Equity Component | Balance as of March 31, 2025 (in millions) | Issuance of Mandatory Convertible Preferred Stock, net | Mandatory Convertible Preferred Stock dividend | Convertible Preferred Stock dividend | Issuance of common stock, net | Proceeds from stock option exercises | Awards assumed in acquisition | Vesting of stock-based compensation awards | Stock-based compensation | Other comprehensive loss | Net loss | Balance as of June 30, 2025 (in millions) | | :----------------------------------- | :----------------------------------------- | :--------------------------------------------- | :------------------------------------- | :----------------------------------- | :---------------------------- | :--------------------------------- | :-------------------------- | :----------------------------------------- | :------------------------- | :----------------------- | :--------- | :--------------------------------------- | | Mandatory Convertible Preferred Stock | $— | $558.1 | $— | $— | $— | $— | $— | $— | $— | $— | $— | $558.1 | | Convertible Preferred Stock | $498.6 | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— | $498.6 | | Common Stock | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— | | Additional Paid-in Capital | $4,580.7 | $— | $— | $— | $4,218.4 | $14.3 | $87.5 | $(0.1) | $65.0 | $— | $— | $8,965.8 | | Retained Earnings (Accumulated Deficit) | $(20.0) | $— | $(3.1) | $(22.5) | $— | $— | $— | $— | $— | $— | $(58.5) | $(104.1) | | Accumulated Other Comprehensive Loss | $— | $— | $— | $— | $— | $— | $— | $— | $— | $(3.1) | $— | $(3.1) | | Total Stockholders' Equity | $5,059.3 | $558.1 | $(3.1) | $(22.5) | $4,218.4 | $14.3 | $87.5 | $(0.1) | $65.0 | $(3.1) | $(58.5) | $9,915.3 | - Total stockholders' equity increased to **$9,915.3 million** as of June 30, 2025, from **$5,052.9 million** at December 31, 2024, primarily due to the issuance of Mandatory Convertible Preferred Stock (**$558.1 million**) and common stock (**$4,218.4 million** net of issuance costs)[12](index=12&type=chunk)[20](index=20&type=chunk)[23](index=23&type=chunk) - The company reported an accumulated deficit of **$(104.1) million** as of June 30, 2025, reflecting net losses and preferred stock dividends[12](index=12&type=chunk)[20](index=20&type=chunk)[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines QXO's cash generation and usage, significantly impacted by the Beacon Acquisition and related financing | Cash Flow Activity | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (in millions) | | :-------------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------- | | Net cash used in operating activities | $(137.7) | $(0.7) | $(137.0) | | Net cash used in investing activities | $(10,575.4) | $(0.1) | $(10,575.3) | | Net cash provided by financing activities | $7,923.7 | $965.9 | $6,957.8 | | Net (decrease) increase in cash | $(2,789.7) | $965.1 | $(3,754.8) | | Cash, cash equivalents and restricted cash, end of period | $2,282.3 | $971.3 | $1,311.0 | - Net cash used in operating activities increased significantly to **$(137.7) million** for the six months ended June 30, 2025, primarily due to seasonal working capital requirements for inventory purchases and cash collections following the Beacon Acquisition[26](index=26&type=chunk)[214](index=214&type=chunk) - Net cash used in investing activities surged to **$(10,575.4) million**, overwhelmingly driven by the **$10,556.5 million** cash paid for the Beacon Acquisition[26](index=26&type=chunk)[215](index=215&type=chunk) - Net cash provided by financing activities increased to **$7,923.7 million**, reflecting significant debt issuances (Notes, Term Loan, ABL Facility) and equity offerings (common stock, Mandatory Convertible Preferred Stock) to fund the acquisition[26](index=26&type=chunk)[216](index=216&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Description of Business](index=14&type=section&id=1.%20Description%20of%20Business) This note describes QXO's transformation into a building products distribution company following the Beacon Acquisition - QXO, Inc. transitioned from a technology solutions and professional services company to a building products distribution company following the acquisition of Beacon Roofing Supply, Inc. on April 29, 2025[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - The company aims to become the tech-enabled leader in the **$800 billion** building products distribution industry, targeting **$50 billion** in annual revenues within the next decade through acquisitions and organic growth[32](index=32&type=chunk) [2. Basis of Presentation and Significant Accounting Policies](index=14&type=section&id=2.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note outlines the accounting principles and policies applied, including the treatment of the Beacon Acquisition - The Beacon Acquisition was accounted for using the acquisition method, with Beacon determined as the predecessor entity for financial reporting due to its substantially larger operations[35](index=35&type=chunk) Cash, Cash Equivalents and Restricted Cash (in millions) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------------ | | Cash and cash equivalents | $2,278.5 | $5,068.5 | | Restricted cash | $3.8 | $3.5 | | Total cash, cash equivalents and restricted cash | $2,282.3 | $5,072.0 | Allowance for Expected Credit Losses (in millions) | Period | Balance at beginning of period | Current period provision | Recoveries | Balance at end of period | | :-------------------------------- | :----------------------------- | :----------------------- | :--------- | :----------------------- | | Six months ended June 30, 2025 | $0.5 | $2.7 | $0.1 | $3.3 | | Year ended December 31, 2024 | $0.5 | $— | $— | $0.5 | Property and Equipment, Net (in millions) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Total property and equipment | $718.0 | $4.3 | | Accumulated depreciation | $(21.7) | $(3.9) | | Total property and equipment, net | $696.3 | $0.4 | Goodwill (in millions) | Period | Balance at beginning of period | Acquisitions | Translation and other adjustments | Balance at end of period | | :----------------------------- | :----------------------------- | :----------- | :-------------------------------- | :----------------------- | | Six months ended June 30, 2025 | $1.2 | $5,138.6 | $(1.9) | $5,137.9 | Intangible Assets, Net (in millions, except time periods) | Category | June 30, 2025 | December 31, 2024 | Weighted-Average Remaining Life (Years) | | :-------------------------------- | :------------ | :------------------ | :-------------------------------------- | | Customer relationships and other | $3,860.7 | $9.4 | 9.8 | | Trade names | $229.9 | $— | 2.8 | | Total amortizable intangible assets, net | $4,003.1 | $4.0 | 9.4 | | Indefinite-lived domain names | $0.7 | $— | N/A | | Total intangibles, net | $4,003.8 | $4.0 | N/A | Estimated Future Amortization Expense for Intangible Assets (in millions) | Year | Amount | | :---------------------- | :----- | | 2025 (July - December) | $231.3 | | 2026 | $462.6 | | 2027 | $462.6 | | 2028 | $410.5 | | 2029 | $385.3 | | Thereafter | $2,050.8 | | Total | $4,003.1 | Accrued Expenses (in millions) | Component | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :------------------ | | Inventory | $228.0 | $— | | Selling, general and administrative | $132.1 | $— | | Payroll and employee benefit costs | $108.8 | $8.1 | | Customer rebates | $80.0 | $— | | Interest expense | $27.2 | $— | | Income taxes | $— | $24.0 | | Other | $9.6 | $6.5 | | Total accrued expenses | $585.7 | $38.6 | Interest Income (Expense), Net (in millions) | Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest income | $22.3 | $3.5 | $78.9 | $3.5 | | Interest expense | $(52.5) | $— | $(52.5) | $(0.1) | | Interest (expense) income, net | $(30.2) | $3.5 | $26.4 | $3.4 | [3. Acquisition](index=20&type=section&id=3.%20Acquisition) This note details the Beacon Acquisition, including consideration, purchase price allocation, and pro forma financial impact - On April 29, 2025, QXO completed the acquisition of Beacon Roofing Supply, Inc. for **$10.6 billion**, transforming QXO into the largest publicly-traded distributor of roofing, waterproofing, and complementary building products in North America[31](index=31&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) Preliminary Aggregate Acquisition Consideration (in millions) | Component | Amount | | :---------------------------------------------------- | :------- | | Cash paid for outstanding Beacon common stock | $7,736.6 | | Converted Beacon RSUs and options | $103.5 | | Payment of Beacon debt, including accrued interest | $2,947.8 | | Preliminary aggregate acquisition consideration | $10,787.9 | | Less: cash acquired | $(143.9) | | Preliminary aggregate acquisition consideration, net of cash acquired | $10,644.0 | Preliminary Purchase Price Allocation (in millions) | Asset/Liability | April 29, 2025 | | :-------------------------------- | :------------- | | Accounts receivable | $1,349.3 | | Inventories | $1,833.2 | | Vendor rebates receivable | $240.1 | | Income tax receivable | $20.1 | | Prepaid expenses and other current assets | $82.3 | | Property and equipment | $695.2 | | Goodwill | $5,138.6 | | Intangibles | $4,080.6 | | Operating lease right-of-use assets | $744.2 | | Other non-current assets | $18.7 | | Accounts payable | $(1,163.6) | | Accrued expenses | $(488.5) | | Deferred incomes taxes | $(1,022.8) | | Other long-term liabilities | $(31.3) | | Operating lease liabilities | $(670.6) | | Finance lease liabilities | $(181.5) | | Preliminary aggregate acquisition consideration | $10,644.0 | Unaudited Pro Forma Combined Net Sales and Net Income (Loss) (in millions) | Metric | 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 sales | $2,693.2 | $2,689.1 | $4,614.4 | $4,616.0 | | Net income (loss) | $(9.2) | $24.4 | $(144.0) | $(263.1) | [4. Restructuring](index=23&type=section&id=4.%20Restructuring) This note describes QXO's restructuring plan post-acquisition, aimed at streamlining operations and reducing costs - Subsequent to the Beacon Acquisition, QXO initiated a restructuring plan to streamline operations, improve efficiency, and reduce costs, resulting in **$72.8 million** in pre-tax restructuring charges[75](index=75&type=chunk) Restructuring Charge Liability (in millions) | Component | June 30, 2025 | | :------------------------------------ | :------------ | | Restructuring charge liability, beginning of the period | $— | | Restructuring charges | $35.3 | | Payments | $(4.4) | | Restructuring charge liability, end of the period | $30.9 | [5. Segment Reporting and Geographic Information](index=24&type=section&id=5.%20Segment%20Reporting%20and%20Geographic%20Information) This note clarifies QXO's single operating segment structure and provides geographic sales information - QXO operates as a single operating segment, with its Chief Executive Officer reviewing consolidated results to allocate resources and assess performance[77](index=77&type=chunk)[78](index=78&type=chunk) Net Sales by Line of Business (in millions) | Product Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Residential roofing products | $929.8 | $— | $929.8 | $— | | Non-residential roofing products | $535.5 | $— | $535.5 | $— | | Complementary building products | $426.1 | $— | $426.1 | $— | | Software products and services | $15.0 | $14.5 | $28.4 | $29.0 | | Total net sales | $1,906.4 | $14.5 | $1,919.8 | $29.0 | - Approximately **97%** of total net sales for the three and six months ended June 30, 2025, were derived from the U.S., and **97%** of long-lived assets were located in the U.S.[81](index=81&type=chunk) [6. Equity](index=25&type=section&id=6.%20Equity) This note details QXO's equity transactions, including preferred stock, warrants, and common stock offerings - On June 6, 2024, QXO issued **1.0 million** shares of Convertible Preferred Stock with an initial liquidation preference of **$1.0 billion**, convertible into **219.0 million** common shares[84](index=84&type=chunk) - The company issued Warrants exercisable for **219.0 million** shares of common stock, with varying exercise prices, exercisable until June 6, 2034[87](index=87&type=chunk) - In May 2025, QXO completed a preferred stock offering, issuing **11.5 million** Depositary Shares representing **5.50%** Series B Mandatory Convertible Preferred Stock, raising **$558.1 million** in net proceeds[92](index=92&type=chunk) - Between April and June 2025, QXO conducted multiple underwritten public offerings of common stock, raising approximately **$3.39 billion** in net proceeds[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) [7. Earnings (Loss) Per Common Share](index=28&type=section&id=7.%20Earnings%20(Loss)%20Per%20Common%20Share) This note presents the calculation of basic and diluted earnings (loss) per common share Basic and Diluted Earnings (Loss) Per Common Share (in millions, except per share amounts) | Metric | 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 loss attributable to common shareholders | $(84.1) | $(6.6) | $(97.9) | $(6.5) | | Total weighted-average common shares outstanding | 564.7 | 0.7 | 508.4 | 0.7 | | Basic and diluted loss per common share | $(0.15) | $(9.93) | $(0.19) | $(9.72) | Potential Dilutive Securities Not Included in Loss Per Common Share (in millions) | Security | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Convertible Preferred Stock | 219.0 | 219.0 | 219.0 | 219.0 | | Mandatory Convertible Preferred Stock | 34.8 | — | 34.8 | — | | Warrants | 219.0 | 219.0 | 219.0 | 219.0 | | Stock-based awards | 30.1 | — | 30.1 | — | | Total potential dilutive securities | 502.9 | 438.0 | 502.9 | 438.0 | [8. Stock-based Compensation](index=29&type=section&id=8.%20Stock-based%20Compensation) This note details QXO's stock-based compensation plans, including awards assumed in the Beacon Acquisition - The 2024 Omnibus Incentive Plan allows for various equity awards, with the Plan Share Limit automatically increasing to **27.0 million** shares for fiscal 2025[105](index=105&type=chunk)[106](index=106&type=chunk) - As part of the Beacon Acquisition, **21.5 million** additional shares were added to the 2024 Plan's share limit, specifically for former Beacon employees or new QXO hires[107](index=107&type=chunk) - Beacon equity awards were converted into QXO RSUs and NSOs, with **$87.5 million** of their fair value related to pre-combination expense included in the purchase price[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) Stock-Based Compensation Expense (in millions) | Award Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | NSOs | $7.8 | $— | $7.8 | $— | | RSUs | $44.0 | $— | $51.6 | $— | | PRSUs | $13.2 | $— | $25.8 | $— | | Total stock-based compensation expense | $65.0 | $— | $85.2 | $— | [9. Debt](index=32&type=section&id=9.%20Debt) This note provides details on QXO's debt instruments, including new issuances for the Beacon Acquisition Outstanding Debt as of June 30, 2025 (in millions) | Debt Type | Principal Balance | Carrying Value | Fair Value | | :------------------------ | :---------------- | :------------- | :--------- | | Revolving Lines of Credit | $199.9 | $199.9 | $199.9 | | Term Loan Facility | $850.0 | $823.2 | $855.3 | | Senior Secured Notes | $2,250.0 | $2,228.3 | $2,323.1 | | Total Long-term Debt, net | $3,100.0 | $3,051.5 | $3,178.4 | - On April 29, 2025, QXO Building Products issued **$2.25 billion** in **6.75%** Senior Secured Notes due 2032, secured by first-priority liens on most assets[122](index=122&type=chunk) - A Term Loan Facility of **$2.25 billion** was also entered into on April 29, 2025, maturing April 30, 2032, with variable interest rates[126](index=126&type=chunk)[127](index=127&type=chunk) - On May 29, 2025, a voluntary principal prepayment of **$1.40 billion** was made under the Term Loan Facility, resulting in a **$45.7 million** loss on debt extinguishment[131](index=131&type=chunk) - An Asset-Based Revolving Credit Facility (ABL Facility) provides up to **$2.0 billion** in borrowing availability, with **$199.9 million** outstanding and **$1.78 billion** capacity as of June 30, 2025[133](index=133&type=chunk)[139](index=139&type=chunk) [10. Leases](index=37&type=section&id=10.%20Leases) This note outlines QXO's lease obligations, including operating and finance leases and associated costs Lease Costs Recognized (in millions) | Lease Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease costs | $28.4 | $0.1 | $29.4 | $0.1 | | Finance lease costs (amortization) | $7.7 | $— | $7.7 | $0.1 | | Finance lease costs (interest) | $2.0 | $— | $2.0 | $— | | Variable lease costs | $3.2 | $— | $3.2 | $— | | Total lease costs | $41.3 | $0.1 | $42.3 | $0.2 | Future Lease Payments (in millions) | Year | Operating Leases | Finance Leases | | :---------------------- | :--------------- | :------------- | | 2025 (July - December) | $67.4 | $27.5 | | 2026 | $155.3 | $54.3 | | 2027 | $138.8 | $49.3 | | 2028 | $120.8 | $38.0 | | 2029 | $100.7 | $25.0 | | Thereafter | $249.2 | $17.2 | | Total future lease payments | $832.2 | $211.3 | | Imputed interest | $(152.4) | $(27.3) | | Total lease liabilities | $679.8 | $184.0 | [11. Commitments and Contingencies](index=38&type=section&id=11.%20Commitments%20and%20Contingencies) This note discloses QXO's legal claims and other commitments, assessing potential financial impacts - The company is involved in various legal claims in the normal course of business and believes it has adequately accrued for probable and reasonably estimable loss contingencies[144](index=144&type=chunk)[145](index=145&type=chunk) - Stockholder demand letters related to Beacon Acquisition disclosures are not believed to be material, individually or in aggregate[146](index=146&type=chunk) [12. Income Taxes](index=38&type=section&id=12.%20Income%20Taxes) This note explains QXO's income tax provisions, effective tax rates, and the impact of recent tax legislation Effective Tax Rates (excluding discrete items) | Period | 2025 | 2024 | | :------------------------------ | :----- | :----- | | Three Months Ended June 30, | 72.7% | 28.9% | | Six Months Ended June 30, | 74.5% | 27.3% | - The significant increase in effective tax rates for 2025 is primarily due to lower pre-tax income coupled with increased compensation above **$1 million** and non-deductible transaction costs from the Beacon Acquisition[147](index=147&type=chunk) - The company is evaluating the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements, which includes provisions for tax treatment of businesses and international tax framework modifications[148](index=148&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses QXO's financial condition and operational results, highlighting the transformative impact of the Beacon Acquisition [Overview](index=39&type=section&id=Overview) This section provides a high-level summary of QXO's business transformation and strategic objectives - QXO transitioned from a technology solutions and professional services company to a building products distribution company following the Beacon Acquisition[150](index=150&type=chunk)[152](index=152&type=chunk) - The company aims to become the tech-enabled leader in the **$800 billion** building products distribution industry, targeting **$50 billion** in annual revenues within the next decade through accretive acquisitions and organic growth[152](index=152&type=chunk) [Beacon Acquisition](index=39&type=section&id=Beacon%20Acquisition) This section briefly reiterates the completion and impact of the **$10.6 billion** Beacon Acquisition - On April 29, 2025, QXO completed the acquisition of Beacon Roofing Supply, Inc. for **$10.6 billion**, renaming it QXO Building Products, Inc.[151](index=151&type=chunk) [Results of Consolidated Operations](index=39&type=section&id=Results%20of%20Consolidated%20Operations) This section summarizes QXO's consolidated financial performance, highlighting key changes post-acquisition | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net sales | $1,906.4 | $14.5 | $1,919.8 | $29.0 | | Gross profit | $401.7 | $5.8 | $407.0 | $11.5 | | Loss from operations | $(162.1) | $(4.3) | $(201.5) | $(4.1) | | Net loss | $(58.5) | $(0.6) | $(49.8) | $(0.5) | - Net sales for the three and six months ended June 30, 2025, significantly increased to **$1,906.4 million** and **$1,919.8 million**, respectively, primarily due to the Beacon Acquisition[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - The company reported increased net losses for both periods, driven by higher operating expenses, interest expense, and a loss on debt extinguishment related to the acquisition and associated financing[154](index=154&type=chunk)[159](index=159&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk) [Net Sales](index=41&type=section&id=Net%20Sales) This section analyzes the significant increase in net sales, primarily driven by the Beacon Acquisition Net Sales by Line of Business (in millions) | Product Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Residential roofing products | $929.8 | $— | $929.8 | $— | | Non-residential roofing products | $535.5 | $— | $535.5 | $— | | Complementary building products | $426.1 | $— | $426.1 | $— | | Software products and services | $15.0 | $14.5 | $28.4 | $29.0 | | Total net sales | $1,906.4 | $14.5 | $1,919.8 | $29.0 | - The substantial increase in net sales for both the three and six months ended June 30, 2025, was primarily attributable to the inclusion of Beacon's net sales following the April 29, 2025 acquisition[155](index=155&type=chunk)[156](index=156&type=chunk) [Cost of Products Sold](index=41&type=section&id=Cost%20of%20Products%20Sold) This section examines the increase in cost of products sold, influenced by higher sales and inventory adjustments - Cost of products sold increased to **$1.50 billion** for the three months and **$1.51 billion** for the six months ended June 30, 2025, up from **$8.7 million** and **$17.5 million** respectively in the prior year, mainly due to higher net sales from the Beacon Acquisition[157](index=157&type=chunk)[158](index=158&type=chunk) - Cost of products sold was negatively impacted by inventory fair value adjustments resulting from recording Beacon's inventory at fair value on the acquisition date[157](index=157&type=chunk)[158](index=158&type=chunk) [Selling, General and Administrative ("SG&A")](index=41&type=section&id=Selling,%20General%20and%20Administrative%20(%22SG%26A%22)) This section analyzes the rise in SG&A expenses, driven by acquisition-related costs and ongoing operations - SG&A expense rose to **$456.8 million** for the three months and **$501.2 million** for the six months ended June 30, 2025, from **$9.8 million** and **$15.0 million** respectively in the prior year[159](index=159&type=chunk)[160](index=160&type=chunk) - The increase was primarily driven by costs supporting ongoing business operations post-Beacon Acquisition, acquisition-related transaction costs (**$65.6 million** for three months, **$75.5 million** for six months), and stock-based compensation expense (**$65.0 million** for three months, **$85.2 million** for six months)[159](index=159&type=chunk)[160](index=160&type=chunk) [Depreciation Expense](index=42&type=section&id=Depreciation%20Expense) This section details the increase in depreciation expense due to the expanded asset base from the Beacon Acquisition - Depreciation expense increased to **$27.2 million** for the three months and **$27.3 million** for the six months ended June 30, 2025, from **$0.1 million** and **$0.2 million** respectively in the prior year, due to the increase in property and equipment from the Beacon Acquisition[161](index=161&type=chunk)[162](index=162&type=chunk) [Amortization Expense](index=42&type=section&id=Amortization%20Expense) This section explains the rise in amortization expense from new intangible assets acquired in the Beacon Acquisition - Amortization expense rose to **$79.8 million** for the three months and **$80.0 million** for the six months ended June 30, 2025, from **$0.2 million** and **$0.4 million** respectively in the prior year, primarily due to amortization of new customer relationships and trade names intangible assets recognized from the Beacon Acquisition[163](index=163&type=chunk)[164](index=164&type=chunk) [Interest (expense) income, net](index=42&type=section&id=Interest%20(expense)%20income,%20net) This section analyzes the shift in net interest, driven by new debt for the Beacon Acquisition - Interest (expense) income, net, shifted to **$(30.2) million** for the three months ended June 30, 2025, from **$3.5 million** income in the prior year, mainly due to higher interest expense from new debt issued for the Beacon Acquisition, partially offset by increased interest income from higher cash balances[165](index=165&type=chunk) - For the six months ended June 30, 2025, interest income, net, was **$26.4 million**, up from **$3.4 million**, driven by higher average interest-bearing cash balances, partially offset by increased interest expense from acquisition-related debt[166](index=166&type=chunk) [Loss on Debt Extinguishment](index=42&type=section&id=Loss%20on%20Debt%20Extinguishment) This section explains the **$45.7 million** loss on debt extinguishment from a Term Loan Facility prepayment - A loss on debt extinguishment of **$45.7 million** was recognized for both the three and six months ended June 30, 2025, due to a **$1.40 billion** principal prepayment under the Term Loan Facility, including pro-rata extinguishment of original issue discounts and debt issuance costs[167](index=167&type=chunk) [Income Taxes](index=42&type=section&id=Income%20Taxes) This section discusses the increased tax benefit and effective tax rates, influenced by acquisition-related factors - Benefit from income taxes increased to **$177.8 million** for the three months and **$169.3 million** for the six months ended June 30, 2025, compared to **$0.2 million** for both periods in the prior year[168](index=168&type=chunk)[169](index=169&type=chunk) - The increase in tax benefit was primarily due to lower pre-tax income combined with an increase in compensation above **$1 million** and non-deductible transaction costs related to the Beacon Acquisition[168](index=168&type=chunk)[169](index=169&type=chunk) - The effective tax rate, excluding discrete items, was **72.7%** for the three months and **74.5%** for the six months ended June 30, 2025, significantly higher than the prior year's **28.9%** and **27.3%**, respectively[168](index=168&type=chunk)[169](index=169&type=chunk) [Non-GAAP Financial Measures](index=43&type=section&id=Non-GAAP%20Financial%20Measures) This section presents non-GAAP financial measures used to provide additional insights into QXO's performance - QXO uses non-GAAP financial measures such as Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Net Income (Loss), Adjusted Diluted EPS, Adjusted EBITDA, and Adjusted EBITDA Margin to provide additional insights into its financial results and core operating performance[171](index=171&type=chunk)[172](index=172&type=chunk)[174](index=174&type=chunk) Adjusted Gross Profit and Adjusted Gross Margin Reconciliation (in millions, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross profit | $401.7 | $5.8 | $407.0 | $11.5 | | Inventory fair value adjustments | $80.3 | $— | $80.3 | $— | | Adjusted Gross Profit | $482.0 | $5.8 | $487.3 | $11.5 | | Gross margin | 21.1% | 40.0% | 21.2% | 39.7% | | Adjusted Gross Margin | 25.3% | 40.0% | 25.4% | 39.7% | Adjusted Net Income and Adjusted Diluted EPS Reconciliation (in millions, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Net loss | $(58.5) | $(49.8) | | Adjusted Net Income | $109.2 | $144.4 | | Adjusted Net Income attributable to common stockholders | $83.6 | $96.3 | | Basic and diluted loss per common share | $(0.15) | $(0.19) | | Adjusted Diluted EPS | $0.11 | $0.17 | | Adjusted diluted weighted-average common shares outstanding | 702.0 | 580.6 | Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation (in millions, except percentages) | Metric | 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 loss | $(58.5) | $(0.6) | $(49.8) | $(0.5) | | Adjusted EBITDA | $204.6 | $(1.2) | $195.6 | $(0.7) | | Net margin | (3.1)% | (4.1)% | (2.6)% | (1.7)% | | Adjusted EBITDA Margin | 10.7% | (8.3)% | 10.2% | (2.4)% | [Seasonality](index=45&type=section&id=Seasonality) This section discusses the seasonal and weather-dependent nature of demand for exterior building materials - Demand for exterior building materials is seasonal and weather-dependent, with net sales and net income typically highest in quarters ending June 30, September 30, and December 31, and lowest in the quarter ending March 31 due to winter construction cycles[178](index=178&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section details QXO's cash position, funding sources, and uses of cash, including acquisition financing - As of June 30, 2025, QXO's cash balance was **$2.28 billion**. Primary liquidity sources include cash on hand, cash from operations, and borrowings under the ABL Facility[179](index=179&type=chunk) - The company's primary uses of cash post-Beacon Acquisition are working capital, debt service, and capital expenditures[179](index=179&type=chunk) - QXO paid **$22.5 million** and **$45.0 million** in dividends to Convertible Preferred Stock holders for the three and six months ended June 30, 2025, respectively[181](index=181&type=chunk) - The company raised significant capital through private placements and registered equity offerings, including **$823.8 million** from a March 2025 private placement and approximately **$3.39 billion** from public offerings between April and June 2025[184](index=184&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) - New debt incurred for the Beacon Acquisition includes **$2.25 billion** in **6.75%** Senior Secured Notes due 2032 and a **$2.25 billion** Term Loan Facility due 2032, along with an ABL Credit Agreement providing up to **$2.0 billion** in revolving credit[196](index=196&type=chunk)[200](index=200&type=chunk)[207](index=207&type=chunk) Cash Flows (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(137.7) | $(0.7) | | Net cash used in investing activities | $(10,575.4) | $(0.1) | | Net cash provided by financing activities | $7,923.7 | $965.9 | | Net (decrease) increase in cash | $(2,789.7) | $965.1 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines QXO's exposure to market risks, primarily focusing on interest rate risk. The company's cash equivalents are short-term, limiting interest rate sensitivity, while its debt portfolio includes both floating and fixed-rate instruments, with variable-rate debt having a weighted-average effective interest rate of 6.94% as of June 30, 2025 - QXO has minimal foreign currency exposure, with operations principally within the U.S.[217](index=217&type=chunk) - The company's cash equivalents are short-term, making their fair value not significantly affected by interest rate changes[218](index=218&type=chunk) - As of June 30, 2025, QXO had **$199.9 million** in outstanding variable-rate borrowings under its ABL Facility, **$823.2 million** under its Term Loan Facility, and **$2.23 billion** under fixed-rate Senior Secured Notes[218](index=218&type=chunk) - The weighted-average effective interest rate on variable-rate debt instruments was **6.94%** as of June 30, 2025, and a **10%** change in interest rates is not expected to materially affect interest income or expense[218](index=218&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of QXO's disclosure controls and procedures, concluding their effectiveness as of June 30, 2025. It also notes the ongoing integration of policies, processes, and systems following the Beacon Acquisition, which may impact internal control over financial reporting, while acknowledging the inherent limitations of any control system - Management, including the principal executive and financial officers, concluded that QXO's disclosure controls and procedures were effective as of June 30, 2025[220](index=220&type=chunk) - The Beacon Acquisition on April 29, 2025, led to ongoing integration of policies, processes, people, technology, and operations, which management will continue to evaluate for its impact on internal control over financial reporting[221](index=221&type=chunk) - The company acknowledges that disclosure controls and internal control over financial reporting are designed to provide reasonable, not absolute, assurance and may not prevent or detect all errors or fraud[222](index=222&type=chunk) PART II. OTHER INFORMATION This section provides additional information beyond the financial statements, including legal proceedings and risk factors [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 11 of the financial statements for information regarding QXO's legal proceedings, commitments, and contingencies - Information regarding legal proceedings is cross-referenced to Note 11 – Commitments and Contingencies in Item 1 of the financial statements[224](index=224&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could materially affect QXO's business, financial condition, or results of operations. Key areas of risk include those related to common stock ownership, product supply and vendor relations, the company's growth strategy and acquisitions (especially the Beacon Acquisition), cyclicality and seasonality, information technology and cybersecurity threats, human capital, regulatory compliance, and the substantial indebtedness incurred [Risks Related to Ownership of our Common Stock](index=53&type=section&id=Risks%20Related%20to%20Ownership%20of%20our%20Common%20Stock) This section details risks associated with QXO's common stock, including potential market price impacts and ranking - The Mandatory Convertible Preferred Stock and Depositary Shares may adversely affect the market price of QXO's common stock due to potential resale, investor preference for preferred shares, and hedging activities[226](index=226&type=chunk) - QXO's common stock ranks junior to both Convertible Perpetual Preferred Stock and Mandatory Convertible Preferred Stock regarding dividends and liquidation distributions[227](index=227&type=chunk) [Risks Related to Product Supply and Vendor Relations](index=54&type=section&id=Risks%20Related%20to%20Product%20Supply%20and%20Vendor%20Relations) This section outlines risks concerning product availability, supplier relationships, and pricing fluctuations - Inability to obtain distributed products due to supply disruptions (e.g., unanticipated demand, production difficulties, loss of key supplier arrangements, global events) could result in lost revenues, reduced margins, and damaged customer relationships[228](index=228&type=chunk) - Changes in supplier pricing and demand, influenced by raw material costs, energy costs, labor costs, tariffs, and inflation, could adversely affect income and gross margins, especially if price increases cannot be passed on to customers[230](index=230&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk) - Adverse changes in vendor rebate programs, which reduce product costs, could lower gross margins and income in future periods[234](index=234&type=chunk) [Risks Related to Acquisitions and our Growth Strategy](index=55&type=section&id=Risks%20Related%20to%20Acquisitions%20and%20our%20Growth%20Strategy) This section addresses risks associated with QXO's growth strategy, particularly through acquisitions and operational integration - QXO's inorganic growth rate may slow if it cannot identify suitable acquisition targets or successfully complete acquisitions on acceptable terms[235](index=235&type=chunk) - Acquisitions involve numerous risks, including difficulties in integrating operations, technologies, and employees; diversion of resources; potential loss of key employees; cybersecurity risks; unforeseen liabilities; and failure to achieve expected cost savings or profitability[237](index=237&type=chunk) - Maintaining a strong safety record is crucial, as catastrophic safety incidents involving employees, customers, or the public, particularly with the commercial fleet, could result in material liabilities and reputational damage[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) [Risks Related to Cyclicality, Seasonality, and Weather](index=57&type=section&id=Risks%20Related%20to%20Cyclicality,%20Seasonality,%20and%20Weather) This section highlights risks from market cyclicality, seasonal demand, and unpredictable weather patterns - The business is susceptible to cyclicality in residential and non-residential construction markets, which depend on factors like credit availability, interest rates, and consumer confidence, potentially leading to lower revenues and reduced profitability during economic downturns[243](index=243&type=chunk) - Seasonal changes, unpredictable weather patterns, and natural disasters (e.g., hurricanes, floods, wildfires) can significantly impact financial results by affecting demand, supply chains, branch staffing, and customers' ability to pay[244](index=244&type=chunk)[245](index=245&type=chunk) [Risks Related to Information Technology](index=57&type=section&id=Risks%20Related%20to%20Information%20Technology) This section addresses risks related to IT system interruptions, cybersecurity threats, and data privacy compliance - Interruptions in IT systems, including those from cybersecurity threats, could cause material operational problems (inventory, collections, customer service, cost control) and adversely affect financial results[246](index=246&type=chunk)[247](index=247&type=chunk) - IT systems are vulnerable to natural disasters, power outages, employee error, cyber-attacks (viruses, ransomware), and the increasing sophistication of AI-aided threats, which can lead to business disruption, data theft, and increased costs[248](index=248&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk) - Failure to comply with data privacy laws and regulations could result in litigation, significant sanctions, and harm to the company's reputation and financial condition[251](index=251&type=chunk) [Risks Related to Human Capital](index=59&type=section&id=Risks%20Related%20to%20Human%20Capital) This section covers risks related to retaining key personnel, attracting talent, and potential labor disputes - The loss of key executive officers or management personnel, or the inability to attract and retain qualified talent, could adversely affect QXO's operations and growth strategies[254](index=254&type=chunk) - Work stoppages, union negotiations, labor disputes, or challenges in customers' ability to attract and retain workers could increase labor costs and negatively impact demand for QXO's products[255](index=255&type=chunk)[256](index=256&type=chunk) [Regulatory Risk](index=59&type=section&id=Regulatory%20Risk) This section addresses risks from compliance with various laws and regulations, and potential impacts of violations - QXO is subject to numerous federal, state, provincial, and local laws and regulations (environmental, climate, transportation, health and safety, tax), with compliance potentially increasing general and administrative costs[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) - Violations of these laws or changes in their interpretation could lead to penalties, fines, operational curtailment, and material adverse effects on the business[259](index=259&type=chunk)[260](index=260&type=chunk) [Risks Related to the Acquisition of Beacon](index=60&type=section&id=Risks%20Related%20to%20the%20Acquisition%20of%20Beacon) This section details specific risks associated with integrating Beacon, including operational, financial, and reputational challenges - The successful integration of Beacon's operations is subject to risks including unforeseen difficulties in integrating systems and cultures, diversion of resources, potential loss of key employees, and the inability to achieve anticipated cost savings and synergies[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk)[267](index=267&type=chunk) - Beacon may have unknown or contingent liabilities that were not discovered during due diligence, which could materially adversely affect QXO's financial condition[265](index=265&type=chunk) - Acquisition accounting adjustments, including the allocation of purchase price to assets and liabilities at fair value, could materially impact QXO's consolidated financial statements and future results[266](index=266&type=chunk) - Business uncertainties following the acquisition, such as customers and suppliers delaying decisions or terminating relationships, could negatively affect QXO's revenues, earnings, and cash flows[268](index=268&type=chunk) [Risks Related to Our Indebtedness](index=61&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) This section addresses risks stemming from QXO's substantial debt, including servicing obligations and restrictive covenants - QXO incurred substantial additional indebtedness of approximately **$4.9 billion** (face value) in connection with the Beacon Acquisition, along with **$2.0 billion** in revolving commitments under the ABL Facility[269](index=269&type=chunk) - A high level of debt could make it difficult to satisfy obligations, reduce funds for other purposes, limit additional financing, increase vulnerability to economic conditions, and restrict strategic activities[270](index=270&type=chunk) - Inability to generate sufficient cash flow to service debt obligations could lead to liquidity problems, forcing QXO to reduce investments, dispose of assets, or seek additional capital, which may not be successful[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) - Debt agreements contain restrictive covenants that limit QXO's operational flexibility, and a failure to comply could result in an event of default, accelerating debt and potentially allowing lenders to seize collateral[275](index=275&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there are no unregistered sales of equity securities or use of proceeds to report for the period - This item is not applicable for the reporting period[278](index=278&type=chunk) [Item 3. Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[279](index=279&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that there are no mine safety disclosures to report - There are no mine safety disclosures[280](index=280&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) This section notes the inclusion of unaudited predecessor financial information for QXO Building Products, Inc. as an exhibit to the Quarterly Report - Unaudited predecessor financial information for QXO Building Products, Inc. is included as Exhibit 99.1 to this Quarterly Report[281](index=281&type=chunk) [Item 6. Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section provides a comprehensive list of exhibits filed with the Form 10-Q, including certificates of designations, deposit agreements, indentures, credit agreements, and various certifications - The report includes various exhibits such as Certificate of Designations for Series B Mandatory Convertible Preferred Stock, Deposit Agreement, Indenture for Senior Secured Notes, Term Loan Credit Agreement, and Asset-Based Revolving Credit Agreement[283](index=283&type=chunk) - Certifications by the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are also furnished[283](index=283&type=chunk) - Unaudited predecessor financial information for QXO Building Products, Inc. is filed as Exhibit 99.1[283](index=283&type=chunk) [Signature](index=66&type=section&id=Signature) This section contains the signatures of the registrant's authorized officers, Brad Jacobs (Chief Executive Officer) and Ihsan Essaid (Chief Financial Officer), certifying the report on Form 10-Q - The report is signed by Brad Jacobs, Chief Executive Officer, and Ihsan Essaid, Chief Financial Officer, on August 14, 2025[287](index=287&type=chunk)

Company Performance - QXO, Inc. reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.04 per share, compared to earnings of $3.22 per share a year ago, representing an earnings surprise of +175.00% [1] - The company posted revenues of $1.91 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.86%, compared to year-ago revenues of $14.54 million [2] - Over the last four quarters, QXO has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - QXO shares have increased approximately 32.5% since the beginning of the year, outperforming the S&P 500's gain of 10% [3] - The current consensus EPS estimate for the coming quarter is $0.18 on $2.85 billion in revenues, and $0.37 on $7.24 billion in revenues for the current fiscal year [7] Industry Outlook - The Technology Services industry, to which QXO belongs, is currently in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]

[Executive Summary & Q2 2025 Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Financial%20Highlights) [Second Quarter 2025 Summary Results](index=1&type=section&id=Second%20Quarter%202025%20Summary%20Results) QXO reported a basic and diluted loss per common share of $(0.15) and adjusted diluted EPS (non-GAAP) of $0.11, with net sales of $1,906.4 million and adjusted EBITDA of $204.6 million Second Quarter 2025 Summary Results (Millions of USD, except per share data) | Metric (Millions of USD, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | | Net Sales | $1,906.4 | $14.5 | | Gross Profit | $401.7 | $5.8 | | Adjusted Gross Profit | $482.0 | $5.8 | | Gross Margin | 21.1 % | 40.0 % | | Adjusted Gross Margin | 25.3 % | 40.0 % | | Net Loss | $(58.5) | $(0.6) | | Net Margin | (3.1)% | (4.1)% | | Adjusted EBITDA | $204.6 | $(1.2) | | Adjusted EBITDA Margin | 10.7 % | (8.3)% | | Adjusted Net Income | $109.2 | N/M | | Basic and Diluted Loss Per Common Share | $(0.15) | N/M | | Adjusted Diluted EPS | $0.11 | N/M | [Second Quarter Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) QXO completed the acquisition of Beacon Roofing Supply, Inc. for **$1.06 billion** on April 29, 2025, with Q2 results reflecting Beacon's operations from acquisition date to June 30 - QXO completed the acquisition of Beacon Roofing Supply, Inc. on April 29, 2025, for a total purchase price of **$1.06 billion**, financed through cash, debt, and equity[5](index=5&type=chunk) - Second quarter operating financial results include Beacon's operating data only from the acquisition completion date of April 29, 2025, through June 30[6](index=6&type=chunk) Second Quarter Highlights (Millions of USD) | Metric | Amount (Millions of USD) | | :--------------------- | :----------------------- | | Net Sales | $1,910 | | Adjusted Gross Margin | 25.3% | | Adjusted Net Income | $109.2 | | Adjusted Diluted EPS | $0.11 | | Adjusted EBITDA | $204.6 | | Adjusted EBITDA Margin | 10.7% | [Management Commentary](index=1&type=section&id=Management%20Commentary) QXO Chairman and CEO Brad Jacobs noted smooth integration of Beacon, identifying opportunities beyond initial expectations, and initiated a transformation plan targeting **$50 billion** in annual revenue within a decade - Beacon's integration is progressing smoothly, revealing opportunities exceeding initial expectations[4](index=4&type=chunk) - The company has made key strategic hires and launched an extensive transformation plan focusing on pricing, procurement, sales, organizational structure, logistics, and other core performance drivers[4](index=4&type=chunk) - The company is confident in organically at least doubling Beacon's original EBITDA and has set a long-term goal of **$50 billion** in annual revenue within the next decade[4](index=4&type=chunk) [Financing Update](index=2&type=section&id=Financing%20Update) QXO raised **$970 million** through debt and equity offerings in Q2, repaid **$140 million** in term loans, and reported net debt of approximately **$120 million** as of June 30, 2025 - In the second quarter, the company raised **$490 million** through debt and an additional **$480 million** through common stock and mandatory convertible preferred stock offerings[8](index=8&type=chunk) - Subsequently, the company repaid **$140 million** of its term loan[8](index=8&type=chunk) - As of June 30, 2025, the company's net debt was approximately **$120 million**[8](index=8&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) [About QXO](index=2&type=section&id=About%20QXO) QXO is North America's largest publicly traded distributor of roofing, waterproofing, and related building products, aiming to be a technology-enabled leader in the **$800 billion** building products distribution industry and achieve **$50 billion** in annual revenue within a decade - QXO is North America's largest publicly traded distributor of roofing, waterproofing, and related building products[9](index=9&type=chunk) - The company plans to be a technology-enabled leader in the **$800 billion** building products distribution industry and create outsized value for shareholders[9](index=9&type=chunk) - The company is executing its strategy to achieve **$50 billion** in annual revenue within the next decade through accretive acquisitions and organic growth[9](index=9&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) [Definition and Rationale](index=2&type=section&id=Definition%20and%20Rationale) QXO provides definitions and reconciliations for non-GAAP financial measures, including Adjusted Gross Profit, Adjusted Net Income, and Adjusted EBITDA, which management uses to assess ongoing performance by excluding items not reflective of core operations - QXO's non-GAAP financial measures include: Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, and Adjusted EBITDA Margin[11](index=11&type=chunk) - Management uses these non-GAAP financial measures for financial, operational, and planning decisions, and to evaluate QXO's ongoing performance[13](index=13&type=chunk) - These metrics exclude items that may not reflect or be indicative of QXO's core operating performance, helping investors compare with prior periods and assess business trends[13](index=13&type=chunk) [Forward-Looking Statements & Risk Factors](index=2&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements based on management's assumptions and analysis of historical trends and future developments, subject to known and unknown risks and uncertainties that could cause actual results to differ materially - This press release contains forward-looking statements as defined under the Securities Act of 1933 and the Securities Exchange Act of 1934[14](index=14&type=chunk) - These statements are based on management's certain assumptions and analysis of historical trends, current conditions, and expected future developments[14](index=14&type=chunk) - Forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results, activity levels, performance, or achievements to differ materially from those expressed or implied by such statements[15](index=15&type=chunk) [Risk Factors](index=2&type=section&id=Risk%20Factors) The company faces risks including product supply, supplier pricing, acquisition integration, industry demand fluctuations, economic conditions, IT system security, talent retention, debt obligations, and reliance on key management - Insufficient product supply could lead to lost revenue, reduced profits, and damaged customer relationships[15](index=15&type=chunk) - Changes in supplier pricing and demand, and variations in supplier rebates, could adversely affect revenue and gross margins[15](index=15&type=chunk) - Inability to identify potential acquisition targets or successfully complete acquisitions, and risks associated with the Beacon acquisition, including failure to fully realize anticipated benefits or integration difficulties[15](index=15&type=chunk)[17](index=17&type=chunk) - Demand in the building products distribution industry may soften or shift significantly due to cyclicality or reliance on macroeconomic and political conditions, including inflation, interest rates, labor and supply shortages, weather, and commodity prices[15](index=15&type=chunk) - Risks to the proper functioning of IT systems (including cybersecurity threats and AI usage), and the risk of losing key talent or inability to attract and retain new qualified talent[17](index=17&type=chunk) - Risks related to debt obligations from the Beacon acquisition, and the company's high reliance on the continued leadership of Chairman and CEO Brad Jacobs[17](index=17&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) QXO reported net sales of **$1,906.4 million**, gross profit of **$401.7 million**, and a net loss of **$(58.5) million** for Q2 2025, showing significant growth compared to Q2 2024 primarily due to the Beacon acquisition Condensed Consolidated Statements of Operations (Millions of USD, except per share data) | Metric (Millions of USD, except per share data) | 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 Sales | $1,906.4 | $14.5 | $1,919.8 | $29.0 | | Cost of Products Sold | $1,504.7 | $8.7 | $1,512.8 | $17.5 | | Gross Profit | $401.7 | $5.8 | $407.0 | $11.5 | | Total Operating Expenses | $563.8 | $10.1 | $608.5 | $15.6 | | Operating Loss | $(162.1) | $(4.3) | $(201.5) | $(4.1) | | Interest (Expense) Income, Net | $(30.2) | $3.5 | $26.4 | $3.4 | | Loss on Debt Extinguishment | $(45.7) | — | $(45.7) | — | | Loss Before Income Taxes | $(236.3) | $(0.8) | $(219.1) | $(0.7) | | Income Tax Benefit | $(177.8) | $(0.2) | $(169.3) | $(0.2) | | Net Loss | $(58.5) | $(0.6) | $(49.8) | $(0.5) | | Basic and Diluted Loss Per Common Share | $(0.15) | $(9.93) | $(0.19) | $(9.72) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, QXO's total assets significantly increased to **$17,114.2 million** from **$5,098.3 million** at December 31, 2024, driven by the Beacon acquisition, with total liabilities rising to **$7,198.9 million** and total stockholders' equity to **$9,915.3 million** Condensed Consolidated Balance Sheets (Millions of USD) | Metric (Millions of USD) | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and Cash Equivalents | $2,278.5 | $5,068.5 | | Accounts Receivable, Net | $1,575.7 | $2.7 | | Inventories, Net | $1,849.6 | — | | Total Current Assets | $6,494.8 | $5,089.6 | | Property and Equipment, Net | $696.3 | $0.4 | | Goodwill | $5,137.9 | $1.2 | | Intangible Assets, Net | $4,003.8 | $4.0 | | Total Assets | $17,114.2 | $5,098.3 | | **Liabilities and Stockholders' Equity** | | | | Accounts Payable | $1,426.9 | $6.2 | | Accrued Expenses | $585.7 | $38.6 | | Total Current Liabilities | $2,165.4 | $45.1 | | Long-Term Debt, Net | $3,051.5 | — | | Deferred Income Tax Liabilities, Net | $1,042.3 | — | | Total Liabilities | $7,198.9 | $45.4 | | Mandatory Convertible Preferred Stock | $558.1 | — | | Convertible Preferred Stock | $498.6 | $498.6 | | Additional Paid-in Capital | $8,965.8 | $4,560.5 | | Retained Earnings (Accumulated Deficit) | $(104.1) | $(6.2) | | Total Stockholders' Equity | $9,915.3 | $5,052.9 | | Total Liabilities and Stockholders' Equity | $17,114.2 | $5,098.3 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, QXO reported net cash outflow from operating activities of **$(137.7) million**, net cash outflow from investing activities of **$(10,575.4) million** primarily due to business acquisitions, and net cash inflow from financing activities of **$7,923.7 million** from stock issuances Condensed Consolidated Statements of Cash Flows (Millions of USD) | Cash Flow Activities (Millions of USD) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Outflow from Operating Activities | $(137.7) | $(0.7) | | Net Cash Outflow from Investing Activities | $(10,575.4) | $(0.1) | | Net Cash Inflow from Financing Activities | $7,923.7 | $965.9 | | Effect of Exchange Rate Changes | $(0.3) | — | | Net (Decrease) Increase in Cash and Cash Equivalents | $(2,789.7) | $965.1 | | Cash and Cash Equivalents at Beginning of Period | $5,072.0 | $6.2 | | Cash and Cash Equivalents at End of Period | $2,282.3 | $971.3 | - Net cash outflow from investing activities was primarily due to business acquisitions, totaling **$(10,556.5) million**[23](index=23&type=chunk) - Net cash inflow from financing activities primarily resulted from the issuance of common stock (**$4,218.4 million**) and mandatory convertible preferred stock (**$558.1 million**)[23](index=23&type=chunk) [Sales by Line of Business](index=8&type=section&id=Sales%20by%20Line%20of%20Business) [Three Months Ended June 30, 2025](index=8&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025) In Q2 2025, QXO's net sales reached **$1,906.4 million**, with residential roofing products contributing **48.7%**, non-residential roofing products **28.1%**, and complementary building products **22.4%** Sales by Line of Business (Millions of USD, Percentage %) | Line of Business | 2025 Net Sales (Millions of USD) | Percentage % | 2024 Net Sales (Millions of USD) | Percentage % | | :---------------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | Residential Roofing Products | $929.8 | 48.7 % | $— | 0.0 % | | Non-Residential Roofing Products | $535.5 | 28.1 % | $— | 0.0 % | | Complementary Building Products | $426.1 | 22.4 % | $— | 0.0 % | | Software Products and Services | $15.0 | 0.8 % | $14.5 | 100.0 % | | **Total Net Sales** | **$1,906.4** | **100.0 %** | **$14.5** | **100.0 %** | [Six Months Ended June 30, 2025](index=8&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025) For the six months ended June 30, 2025, QXO's total net sales were **$1,919.8 million**, with residential roofing products as the primary revenue source at **48.5%**, followed by non-residential roofing products at **27.9%** Sales by Line of Business (Millions of USD, Percentage %) | Line of Business | 2025 Net Sales (Millions of USD) | Percentage % | 2024 Net Sales (Millions of USD) | Percentage % | | :---------------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | Residential Roofing Products | $929.8 | 48.5 % | $— | 0.0 % | | Non-Residential Roofing Products | $535.5 | 27.9 % | $— | 0.0 % | | Complementary Building Products | $426.1 | 22.2 % | $— | 0.0 % | | Software Products and Services | $28.4 | 1.4 % | $29.0 | 100.0 % | | **Total Net Sales** | **$1,919.8** | **100.0 %** | **$29.0** | **100.0 %** | [Reconciliation of Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) [Adjusted Gross Profit and Adjusted Gross Profit Margin](index=9&type=section&id=Adjusted%20Gross%20Profit%20and%20Adjusted%20Gross%20Profit%20Margin) QXO reconciled gross profit and gross margin to adjusted gross profit of **$482.0 million** and adjusted gross margin of **25.3%** for Q2 2025, primarily by excluding **$80.3 million** in inventory fair value adjustments Adjusted Gross Profit and Adjusted Gross Profit Margin (Millions of USD, except percentages) | Metric (Millions of USD, except percentages) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross Profit | $401.7 | $5.8 | $407.0 | $11.5 | | Inventory Fair Value Adjustment | $80.3 | — | $80.3 | — | | **Adjusted Gross Profit** | **$482.0** | **$5.8** | **$487.3** | **$11.5** | | Net Sales | $1,906.4 | $14.5 | $1,919.8 | $29.0 | | Gross Margin | 21.1 % | 40.0 % | 21.2 % | 39.7 % | | **Adjusted Gross Margin** | **25.3 %** | **40.0 %** | **25.4 %** | **39.7 %** | - The inventory fair value adjustment resulted from recording inventory at fair value during the business acquisition and is expected to be fully recognized within the year ending December 31, 2025[30](index=30&type=chunk) [Adjusted Net Income and Adjusted Diluted EPS](index=10&type=section&id=Adjusted%20Net%20Income%20and%20Adjusted%20Diluted%20EPS) QXO reconciled net loss and diluted loss per common share to adjusted net income of **$109.2 million** and adjusted diluted EPS of **$0.11** for Q2 2025, after adjustments for amortization, stock-based compensation, debt extinguishment, and other items Adjusted Net Income and Adjusted Diluted EPS (Millions of USD, except per share data) | Metric (Millions of USD, except per share data) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :---------------------------------------------- | :------------------------------- | :----------------------------- | | Net Loss | $(58.5) | $(49.8) | | Loss Before Income Taxes | $(236.3) | $(219.1) | | Amortization | $79.8 | $80.0 | | Stock-Based Compensation | $65.0 | $85.2 | | Loss on Debt Extinguishment | $45.7 | $45.7 | | Restructuring Costs | $35.3 | $35.3 | | Transaction Costs | $65.6 | $75.5 | | Transformation Costs | $11.8 | $11.8 | | Inventory Fair Value Adjustment | $80.3 | $80.3 | | Adjusted Income Before Income Taxes | $147.2 | $194.7 | | Income Tax Impact of Adjusting Items | $38.0 | $50.3 | | **Adjusted Net Income** | **$109.2** | **$144.4** | | Convertible Preferred Stock Dividends | $(22.5) | $(45.0) | | Mandatory Convertible Preferred Stock Dividends | $(3.1) | $(3.1) | | Adjusted Net Income Attributable to Common Stockholders | $83.6 | $96.3 | | Basic and Diluted Loss Per Common Share | $(0.15) | $(0.19) | | **Adjusted Diluted EPS** | **$0.11** | **$0.17** | | Adjusted Diluted Weighted-Average Common Shares Outstanding | 702.0 | 580.6 | - The effective tax rate for adjusted net income (loss) is **25.84%**, influenced by certain tax benefits on adjusted income (loss) before income taxes[32](index=32&type=chunk) [Adjusted EBITDA and Adjusted EBITDA Margin](index=11&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) QXO reconciled net loss to adjusted EBITDA of **$204.6 million** and adjusted EBITDA margin of **10.7%** for Q2 2025, after adjustments for depreciation, amortization, stock-based compensation, interest expense, debt extinguishment, and other items Adjusted EBITDA and Adjusted EBITDA Margin (Millions of USD, except percentages) | Metric (Millions of USD, except percentages) | 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 Loss | $(58.5) | $(0.6) | $(49.8) | $(0.5) | | Depreciation | $27.2 | $0.1 | $27.3 | $0.2 | | Amortization | $79.8 | $0.2 | $80.0 | $0.4 | | Stock-Based Compensation | $65.0 | — | $85.2 | — | | Interest Expense (Income), Net | $30.2 | $(3.5) | $(26.4) | $(3.4) | | Loss on Debt Extinguishment | $45.7 | — | $45.7 | — | | Income Tax Benefit | $(177.8) | $(0.2) | $(169.3) | $(0.2) | | Restructuring Costs | $35.3 | $2.8 | $35.3 | $2.8 | | Transaction Costs | $65.6 | — | $75.5 | — | | Transformation Costs | $11.8 | — | $11.8 | — | | Inventory Fair Value Adjustment | $80.3 | — | $80.3 | — | | **Adjusted EBITDA** | **$204.6** | **$(1.2)** | **$195.6** | **$(0.7)** | | Net Sales | $1,906.4 | $14.5 | $1,919.8 | $29.0 | | Net Margin | (3.1)% | (4.1)% | (2.6)% | (1.7)% | | **Adjusted EBITDA Margin** | **10.7 %** | **(8.3)%** | **10.2 %** | **(2.4)%** | - Loss on debt extinguishment resulted from the cost of extinguishing a portion of the term loan early[34](index=34&type=chunk)

Core Viewpoint - QXO, Inc. is anticipated to report a significant year-over-year decline in earnings despite a substantial increase in revenues, which could influence its stock price depending on the actual results compared to expectations [1][3]. Earnings Expectations - The consensus estimate for QXO's upcoming quarterly earnings is $0.04 per share, reflecting a dramatic year-over-year decrease of 98.8% [3]. - Expected revenues for the quarter are projected at $1.87 billion, representing an increase of 12,772.1% compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from covering analysts [4]. - The Most Accurate Estimate for QXO is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -25.00%, suggesting a bearish sentiment among analysts regarding the company's earnings prospects [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with a strong predictive power for positive readings [9][10]. - QXO currently holds a Zacks Rank of 2, which typically indicates a buy recommendation, but the negative Earnings ESP complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, QXO was expected to post a loss of $0.05 per share but instead reported a loss of -$0.03, resulting in a positive surprise of +40.00% [13]. - Over the past four quarters, QXO has beaten consensus EPS estimates in two instances [14]. Conclusion - While QXO does not appear to be a strong candidate for an earnings beat, investors should consider other factors before making investment decisions related to the stock [17].